Research in Action 2016 by UCI Paul Merage School of Business

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Research in Action T H I R D E D I T I O N | FALL 2016

TA B L E O F C O N T E N T S

3RD EDITION

2 | THE PAUL MERAGE SCHOOL OF BUSINESS

NOT SO DIFFERENT AFTER ALL

CONSUMERS AND SOCIAL MEDIA

THE FOG OF FEEDBACK

T H E S H I F T T O C O R P O R AT E TA X P L A N N I N G

L AT E S T P U B L I C AT I O N S

FA C U LT Y I N T H E N E W S

W E L C O M E N E W FA C U LT Y M E M B E R S

RESEARCH IN ACTION A NOTE FROM THE DEAN

Welcome to the third edition of The Paul Merage School of Business at UC Irvine Research In Action publication which contains recent studies published by our world-renowned faculty, as well as feature articles and research summaries exploring topics from social media to tax planning. Research is one of the many qualities that sets the Merage School apart from other business schools. The caliber of research conducted and the quality of teaching delivered by our faculty are what prepare our graduates for the realities of a constantly changing global business environment. For full copies of the research highlighted within, or to discuss future research collaboration, visit merage.uci.edu/go/faculty. Enjoy,

Eric R. Spangenberg Dean and Professor of Marketing

RESEARCH IN ACTION FALL 2016 | 3

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NOT SO DIFFERENT AFTER ALL: SURPRISING TRUTHS ABOUT H O W C R E AT I V E M I N D S GET HIRED A recent study published in Administrative Science Quarterly suggests that ad agency creative managers are more likely to hire people whose broad interests mirror their own omnivorous cultural tastes. The study brings up questions about diversity in creative workplaces, and reveals more about who gets hired in today’s creative environments. By Connie Clark

The most successful organizations value diversity of thinking and out-of-the-box solutions, but recruiting creative thinkers has always been a tricky, imprecise science. Advertising agencies, whose key assets are measured in the creativity of their employees, are tasked with identifying this potential in job candidates almost every day. So it follows that the industry responsible for introducing concepts like “Think Different” into the general lexicon might offer some unique insights into recruiting and hiring innovative thinkers. In Different Like Me: Why Cultural Omnivores Get Creative Jobs, Professor Sharon Koppman of the UC Irvine Paul Merage School of Business, studied ad agency hiring practices, examining the role

“cultural capital” plays in the process. “Cultural capital refers to widely shared, highstatus cultural signals, such as tastes, cultural interests and styles, which can be used to access economic rewards such as desirable jobs and salaries,” she notes. Koppman points out that the people who do the hiring in ad agency creative departments are not usually human resources PDQDJHUV ,QVWHDG WKH\·UH ZULWHUV DUW directors and creative directors who often view shared cultural experiences as determinants of creativity among job DSSOLFDQWV ,W·V QRW WKDW FUHDWLYH ERVVHV KLUH people with the same interests, Koppman says, but they do tend to seek out those who VKDUH WKHLU RZQ SURFOLYLW\ IRU D EURDG ÀHOG RI interests—cultural omnivores.

Sharon Koppman, Assistant Professor of Organization & Management RESEARCH IN ACTION FALL 2016 | 5

NOT SO DIFFERENT AFTER ALL

/HW·V VD\ WZR FDQGLGDWHV ZLWK VLPLODU H[SHULHQFH DQG ZRUN portfolios are searching for an agency job. One mentions in interviews that she studied opera in college, enjoys bluegrass music, and does pin weaving in her spare time. The other candidate has few interests outside of advertising to discuss. 7KDW GLYHUVLW\ RI LQWHUHVWV ZLOO VHUYH WKH ÀUVW candidate well, as 75 percent of ad agency creative managers consider it a marker for creativity, outranking their interest in FDQGLGDWHV· LQWHUSHUVRQDO VNLOOV SHUFHQW DQG SUHVHQWDWLRQ VNLOOV SHUFHQW Put another way, Koppman says that for a creative candidate with the most omnivorous WDVWH SRVVLEOH IRU H[DPSOH VRPHRQH ZKR might like heavy metal, opera, rap, new DJH DQG /DWLQ PXVLF WKH RGGV RI FUHDWLYH employment in an agency are more than six times greater than they are for a candidate with the least omnivorous taste possible IRU H[DPSOH VRPHRQH ZKR OLNHV RQO\ FRQWHPSRUDU\ URFN

“For a creative candidate with the most omnivorous taste possible... the odds of creative employment in an agency are more than six times greater.”

Koppman cautions these cultural cues can be misleading for creative managers. “Reliance on this signal actually goes against much of what we know about creative careers: that success requires extensive and deliberate practice, that production depends on collectives of individuals with specialized skills, and that creative producers who specialize are more employable.” And, while a long list of cultural activities can signal intellectual curiosity, she adds that it can also suggest a scattered attention span or indecision.

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%XW PRUH VLJQLÀFDQW .RSSPDQ VD\V LV WKH UHVXOWLQJ ODFN of diversity the practice fosters. “Evaluators unconsciously choose people who are similar to them socioeconomically, because cultural omnivores tend to be from privileged class backgrounds.” So, she says, more of the same people get hired. “Employers go out looking to hire VRPHRQH ¶QHZ· DQG ¶GLIIHUHQW·³HVVHQWLDOO\ ¶FUHDWLYH·³DQG WKH\ FRPH EDFN ZLWK someone who is new and different in exactly the same way they are.” She adds, “The H[SOLFLW VHDUFK IRU ¶GLIIHUHQFH· DFWXDOO\ produces a rather homogeneous workforce.”

Even more revealing is that on the ´FUHDWLYHµ VLGH RI DJHQFLHV DV RSSRVHG WR DFFRXQW VHUYLFH PHGLD DQG EXVLQHVV DIIDLUV only 18 percent of employees come from working class backgrounds, and only six percent are non-white. Men outrank women, who comprise only about one-third of creative departments. This lack of diversity is striking, Koppman says. “So much of the research on organizational creativity HPSKDVL]HV WKH QHHG IRU GLYHUVLW\ VSHFLÀFDOO\ WKH ZD\ FUHDWLYH insights come from integrating diverse viewpoints. Here, we KDYH D JURXS RI SHRSOH ZKR FDOO WKHPVHOYHV ¶FUHDWLYHV· DQG H[SOLFLWO\ ORRN IRU ¶GLIIHUHQFH· ZKHQ KLULQJ HPSOR\HHV EXW WKH ZD\ WKH\ HYDOXDWH ¶GLIIHUHQFH· HQGV XS UHZDUGLQJ VLPLODULW\ DQG reproducing the status quo.”

Koppman acknowledges that there are no hard and fast WHVWV WKDW REMHFWLYHO\ GHWHUPLQH ZKHWKHU FDQGLGDWHV ZLOO IXOÀOO their creative potential, and she refers to contrasting hiring SUDFWLFHV DW FRPSDQLHV OLNH *RRJOH ZKHUH LW·V UHSRUWHG WKDW UHFUXLWHUV DUH LQWHUHVWHG LQ FDQGLGDWHV· GHHS NQRZOHGJH RI particular subjects, rather than their many outside interests. Still, ad agencies defend the practice of seeking out people with similar omnivorous cultural interests, citing robust

“Here, we have a group of people who call themselves ‘creatives’ and explicitly look for ‘difference’ when hiring employees but the way they evaluate ‘difference’ ends up rewarding similarity and reproducing the status quo.”

Because you can tell a lot about someone by the activities WKH\ SXUVXH LQ WKHLU VSDUH WLPH ,W·V D JRRG LQGLFDWRU RI WKHLU intellectual curiosity.” The respondent adds, “If you were to look DW WKH ERRNV ,·P UHDGLQJ WKH\ DUH DOO RYHU WKH SODFH EHFDXVH , want to know about everything.” Still, Koppman offers a word of caution to any organization seeking out-of-the box thinkers. “Employers need to be aware that even when they think they are selecting employees H[SOLFLWO\ IRU WKHLU ¶GLIIHUHQFH · RXU XQFRQVFLRXV WHQGHQF\ WR OLNH people who are like us prevails.”

Sharon Koppman is an assistant professor of Organization & Management at the UC Irvine Paul Merage School of Business. Her research examines the work of culture and the culture of work. She studies the work of culture by investigating career and employment SURFHVVHV LQ FXOWXUDO DQG FUHDWLYH ÀHOGV 6KH VWXGLHV WKH FXOWXUH of work by analyzing how culture is used as a resource in the ZRUNSODFH 3URIHVVRU .RSSPDQ·V UHVHDUFK KDV DSSHDUHG LQ The Sociological Quarterly; Poetics; Science, Technology & Human Values; Information Technology & People; Research in the Sociology of Work; and Lecture Notes in Computer Science.

intellectual curiosity as a necessary skill. Said one of the hiring UHVSRQGHQWV ´,W GRHVQ·W PDWWHU D FRS\ZULWHU RU GHVLJQHU«D ORW RI WLPHV WKH ÀUVW TXHVWLRQV , ZLOO DVN DUH ¶'R \RX UHDG" :KDW GR \RX OLNH WR GR LQ \RXU RZQ WLPH" :KDW DUH \RXU KREELHV"·

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Sanjeev Dewan, Professor of Information Systems

CONSUMERS AND SOCIAL MEDIA: W H AT D R I V E S BUYING DECISIONS? By Connie Clark

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What’s behind purchasing decisions for the music buying public? Do they buy songs based on the overall popularity of a song or artist? Or, do they buy based on what their social network friends are listening to? These are among the questions posed in a recent study published in Information Systems Research, and the answers have implications for all types of online communities, and for marketers of everything from books and online video games to movies and travel.

“Popularity or Proximity: Characterizing the Nature of Social ,QÁXHQFH LQ DQ 2QOLQH 0XVLF &RPPXQLW\µ H[DPLQHV SHHU LQÁXHQFH LQ WKH RQOLQH PXVLF FRPPXQLW\ WR GHWHUPLQH LI LW LV SRSXODULW\ LQÁXHQFH GHPDQG DFURVV D EURDG VRFLDO FRPPXQLW\ RU SUR[LPLW\ LQÁXHQFH PXVLF FKRLFHV RI D VPDOOHU FLUFOH RI VRFLDO QHWZRUN IULHQGV WKDW GULYHV PXVLF EX\LQJ GHFLVLRQV 7KH DQVZHUV DUHQ·W MXVW LPSRUWDQW IRU PXVLF FUHDWRUV DQG distributors, says Sanjeev Dewan, professor of Information Systems at the UC Irvine Paul Merage School Business. “In DQ\ ¶ORQJ WDLO· PDUNHW ZKHUH QLFKH FRQWHQW FDQ EH DV LPSRUWDQW DV EHVW VHOOLQJ FRQWHQW XVHUV EHQHÀW IURP ERWK SRSXODULW\ DQG SUR[LPLW\ LQÁXHQFH LQ GHFLGLQJ ZKDW FRQWHQW WR FRQVXPH³HYHQ when, where and how to consume it.” Dewan and his team searched for answers by studying an MP3 blog aggregator site known as The Hype Machine. They pinpointed a particular feature that allows users to REVHUYH RWKHU XVHUV· PXVLF SUHIHUHQFHV 6RQJV DUH WDJJHG DV ´IDYRULWHVµ VLPLODU WR )DFHERRN ´OLNHµ EHKDYLRU DQG XVHUV FDQ YLHZ DJJUHJDWH PXVLF IDYRULWHV SRSXODULW\ DV ZHOO DV IULHQGV· IDYRULWHV SUR[LPLW\ ´2XU DQDO\VLV ÀQGV UREXVW LQÁXHQFH RI ERWK SRSXODULW\ DQG SUR[LPLW\ LQÁXHQFH µ 'HZDQ VD\V %XW KH QRWHV WKDW LW·V QRW DOZD\V WKDW VLPSOH ´3RSXODULW\ LQÁXHQFH LV PRUH LPSRUWDQW IRU narrow-appeal music than mainstream music. And the two types RI LQÁXHQFHV FDQ EH VXEVWLWXWHV IRU HDFK RWKHU µ 'HZDQ DOVR QRWHV WKDW SUR[LPLW\ LQÁXHQFH ZKHQ LW·V DYDLODEOH GRPLQDWHV WKH HIIHFW RI SRSXODULW\ LQÁXHQFH ´%DVLFDOO\ popularity cues drive consumption decisions, until a friend has OLVWHQHG WR D VRQJ³DW ZKLFK SRLQW SUR[LPLW\ LQÁXHQFH WDNHV RYHU %XW WKHUH LV D WLPH DQG SODFH IRU HDFK W\SH RI LQÁXHQFH especially as an exploding variety of music content is available online for downloading or streaming.” The research underscores the need for music websites and RQOLQH UHWDLOHUV WR EH DZDUH RI KRZ WKHVH QXDQFHG LQÁXHQFHV affect buyer decisions, so they can create the right types of marketing programs in response. Dewan suggests that online communities be more proactive in leveraging both popular and proximity resources to increase engagement. For example, he advises that website creators prominently display regular “most popular” lists. This is

especially important for niche or narrow-appeal music he says. ´7R OHYHUDJH SUR[LPLW\ LQÁXHQFH XVHUV VKRXOG EH HQFRXUDJHG and incentivized to increase their social ties and be rewarded for their social engagement with friends.” According to the report authors, the online music community LV DQ LGHDO FRQWH[W WR VWXG\ FRQVXPHU VRFLDO LQÁXHQFHV )RU RQH thing, they say, music is an “experience good,” and consumers depend on the opinions and actions of others as signals that determine whether they will like a particular song. They also point out that music is an “information good,” and that discovery and consumption are online activities that happen at the same time, often on a single website. In addition, the music industry has been dramatically shaped by technology in recent years, VR XQGHUVWDQGLQJ LWV VRFLDO LQÁXHQFHV IRUHVKDGRZV ZKDW FDQ be expected for other information and experience goods—like movies, software and other digital media. Indeed, the study, authored by Dewan, Yi-Jen Ho, Merage School PhD candidate, and Jui Ramaprasad, Merage School 3K' · QRZ DVVRFLDWH SURIHVVRU DW 0F*LOO 8QLYHUVLW\ QRWHV that online music communities, like Spotify and Last.FM, should FRQVLGHU WKHVH PLFUR DQG PDFUR VRFLDO LQÁXHQFHV %XW WKH\ VD\ SRSXODULW\ DQG SUR[LPLW\ LQÁXHQFHV DUH DW SOD\ LQ PDQ\ W\SHV RI RQOLQH FRPPXQLWLHV IURP JDPLQJ WR WUDYHO WR ÀWQHVV DQG even to broader social networks. Which means that sites from Expedia.com to Facebook and Twitter need to pay close attention too.

Sanjeev Dewan is a professor of Information Systems at the UC Irvine Paul Merage School of Business. Prior to joining UCI in Fall 2001, he served on the faculties of the business schools at the University of Washington, Seattle, and George Mason University. He received his PhD in Business Administration from the Simon School at the University of Rochester, in the area of Information Systems. Previously, he received a B.Tech. degree in Mechanical Engineering from the Indian Institute of Technology, Delhi, India. 'HZDQ·V FXUUHQW UHVHDUFK LQWHUHVWV DUH LQ WKH DUHDV RI WKH risk and return of IT investments, business value of Web 2.0 technologies, and electronic commerce. He is currently serving as a senior editor at Information Systems Research and associate editor at Management Science.

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THE FOG OF FEEDBACK: H O W G R AY Z O N E S M A K E S O M E FIRMS SEE RED By Connie Clark

Over the past several quarters, your firm’s financial results have been a mixed bag. At one point, profits were up while sales had leveled off. In a prior quarter, profits sank, yet you gained important ground on your competitors. Now the latest results are in, and it’s a similar up-while-down story. In this type of gray-zone environment, where overall results are open to many interpretations, your next move is crucial. So what do you do?

Almost anyone can identify ambiguous performance within a ÀUP ÀQDQFLDO LQGLFDWRUV DUH XS DQG GRZQ RYHU VXFFHVVLYH TXDUWHUV DQG UHODWLYH WR FRPSHWLWRUV· SHUIRUPDQFH %XW KRZ ÀUPV UHVSRQG to these uncertain environments is a key question examined in a new report by John Joseph, PhD, assistant professor of Strategy at the UC Irvine Paul Merage School of Business. “The Fog of Feedback: Ambiguity and Firm-Responses to Multiple Aspiration Levels,” published in Strategic Management Journal, DQG FR DXWKRUHG E\ 9LEKD *DED DVVRFLDWH SURIHVVRU RI (QWUHSUHQHXUVKLS DW ,16($' ORRNV DW WKH PRELOH GHYLFH industry during the rapid growth and innovation of the last

decade, when manufacturers relied on performance feedback to determine new product and competitive strategies. According to Joseph, ambiguity is characterized by results that are open to interpretation. “Ambiguity is realized when a ÀUP·V SHUIRUPDQFH LQGLFDWRUV DUH ZHDNO\ FRUUHODWHG PDNLQJ LW challenging to establish the relationship between them,” he says. “In the presence of ambiguity, no single interpretation of the ÀUP·V ÀQDQFLDO KHDOWK LV QHFHVVDULO\ FRUUHFW µ Joseph notes three initial results of this ambiguity. First, he VD\V ÀUPV KDYH WURXEOH XQGHUVWDQGLQJ KRZ³DQG WR ZKDW

John Joseph, Assistant Professor of Strategy RESEARCH IN ACTION FALL 2016 | 11

T H E FO G OF F E E DB AC K

GHJUHH³WKHLU HQYLURQPHQWV DUH FKDQJLQJ 6HFRQG WKH\·UH XQVXUH KRZ DQG LI FKDQJLQJ HQYLURQPHQWV ZLOO DIIHFW WKHLU ÀUPV )LQDOO\ WKH\ ÀQG LW GLIÀFXOW WR GHWHUPLQH ZKHWKHU FKDQJHV WR WKH ÀUP·V VWUDWHJLHV DFWLYLWLHV RU SURGXFWV DUH HYHQ QHFHVVDU\ These gray areas have the potential to spell disaster, he says, ZKHQ ÀUPV LJQRUH RU SOD\ GRZQ SRWHQWLDOO\ critical situations. “Often, when managers GRQ·W JHW FOHDU VLJQDOV WKH\ W\SLFDOO\ ORRN at the most favorable signals out there and begin to interpret data through a lens of success.” Joseph calls this positive spin attempt “ambiguity reduction.” He notes that it can prevent managers from recognizing deeper LVVXHV ZLWKLQ D ÀUP DQG OHDG WR IXUWKHU trouble.

S T U C K I N T H E PA S T

In addition, ambiguity may amplify perceived differences RI RSLQLRQ ZLWKLQ WKH ÀUP KH VD\V ´9DULDWLRQV LQ SHUFHSWLRQV may fuel debate concerning the best course of action, which slows decision-making and allocation of resources. With Blackberry, the ambiguity FUHDWHG D GLYLVLYH HQYLURQPHQW ZLWKLQ WKH ÀUP and caused delays in efforts to launch new products.”

“Often, when managers don’t get clear signals, they typically look at the most favorable signals out there and begin to interpret data through a lens of success.”

“In ambiguous situations, managers are more likely to rely on existing beliefs about the environment, instead of updating what they know,” Joseph says. “Their understanding of their environment based on feedback is unlikely to change since they lack an understanding of what the indicators are telling them. For example, the post-iPhone period was an era of strategic ambiguity for [Blackberry developer] RIM. In response, %ODFNEHUU\ IRFXVHG RQ ZKDW LW NQHZ EHVW HIÀFLHQW VHFXUH ORZ power devices and enterprise customers. Yet the market was being driven by consumers and software applications. Battery OLIH DQG VHFXULW\ GLGQ·W PDWWHU DV PXFK DQG %ODFNEHUU\ VXIIHUHG the consequences of their inaction.”

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OPPOSING CAMPS

UNREALISTIC I N T E R P R E TAT I O N S

Joseph observes that many managers engage in self-enhancing behavior and interpret ambiguous feedback in a favorable light to avoid the perception of failure. “Managers may also view performance problems as temporary, since at least some dimension of performance could be interpreted as positive,” he VD\V ´7KH\·UH OHVV OLNHO\ WR WDNH QRWLFH RI WKH QHHG IRU FKDQJHV or they believe that change is unnecessary.” :KLOH -RVHSK·V VWXG\ GRHVQ·W RIIHU TXLFN FXUHV IRU WKHVH maladaptive situations, he recently outlined three general ways ÀUPV FDQ SURWHFW WKHPVHOYHV IURP WKH SRWHQWLDO SUREOHPV WKDW can occur in the face of ambiguous feedback. Here are his suggestions:

UNREALISTIC INTERPRETATIONS AWA R E N E S S “Top managers should be willing to accept an unvarnished view of their performance and fully acknowledge the possibility of failure,” he says.

VIGILANCE “Managers need to rigorously search for potential problems in any ambiguous environment. Extra vigilance is required when it seems like no problems exist, or that existing problems are only temporary.”

T R I A N G U L AT I O N

John Joseph is an assistant professor of Strategy at the UC Irvine Paul Merage School of Business. His research lies at the intersection of strategy and organization theory. He examines organizational designs for better technology development, strategic planning, DQG JURZWK -RVHSK·V UHVHDUFK KDV EHHQ SXEOLVKHG RU LV forthcoming in the Strategic Management Journal, Organization Science, Academy of Management Journal, Long Range Planning, Academy of Management Proceedings and other peer-reviewed publications. He has also developed a number of case studies on structure and strategic decision-making. Joseph is a member of the Academy of Management and a member of the Research Committee of the BPS Division. He is an associated editor for the Journal of Organizational Design, and VHUYHV DV DQ HGLWRULDO ERDUG PHPEHU RI WKH PDQDJHPHQW ÀHOG·V top two journals: Administrative Science Quarterly and Strategic Management Journal.

-RVHSK VXJJHVWV ÀUPV FUHDWH PHFKDQLVPV WR EULQJ managers together. “Teams comprising different functional areas and from various levels in the organization should bring the different interpretations of feedback together so they can come to a more accurate understanding of the environment.”

“Managers may also view performance problems as temporary, since at least some dimension of performance could be interpreted as positive”

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ACCOUNTING FOR THE SHIFT T O C O R P O R AT E TA X P L A N N I N G By A.D. Abt

Financial constraints and the new normal: Recent study identifies a sea change in executive focus—from earnings estimates to tax-deferral strategies—in a calculated bid to raise cash. An old adage states, “There are two certainties in life: death and taxes.” However, a new accounting study has found, VXFFHVVIXO FRPSDQLHV HOXGH ÀQDQFLDO GHDWK E\ HPSOR\LQJ WD[ EUHDNV WR UHVXVFLWDWH WKHLU DLOLQJ FDVK ÁRZ “Financial Constraints and Cash Tax Savings,” a study recently published in The Accounting Review, H[DPLQHV WKH HIIHFW RI ÀQDQFLDO pressure or constraint on executive GHFLVLRQ PDNLQJ DPRQJ SURÀWDEOH 8 6 FRPSDQLHV $ NH\ ÀQGLQJ LV WKDW LQWHQVH ÀQDQFLDO SUHVVXUH VSXUV PDQDJHPHQW WR shift from an earnings growth focus to the DFTXLVLWLRQ RI FROG KDUG FDVK VSHFLÀFDOO\ through tax-deferral strategies. By tracking FRVW DQG EHQHÀWV WKH UHVHDUFKHUV uncovered the surprisingly lucrative results produced by these plans. This survival tactic has proven to increase liquidity, yet, if managed improperly, holds the potential for a public relations nightmare.

FKDQJHV WDNLQJ SODFH ZLWKLQ ÀQDQFH GHSDUWPHQWV

THE LURE OF TAX SAVINGS

The study’s findings offer insights into some of the evolutionary—and, to some degree, revolutionary changes taking place within finance departments.

Led by Terry Shevlin, professor of Accounting at the UC Irvine Paul Merage School of Business, the research team assessed the changes LQ FDVK HIIHFWLYH WD[ UDWHV GHÀQHG IRU WKH VWXG\·V SXUSRVH DV FDVK WD[ SODQQLQJ DQG FKDQJHV LQ FDVK ÁRZ RI SURÀWDEOH ÀUPV 7KH WHDP IRFXVHG RQ SURÀWDEOH ÀUPV LQ RUGHU WR EH consistent with prior research. Says Shevlin, “Our study provides a continuing narrative on how and why successful companies PDNH ÀQDQFLDO GHFLVLRQV µ 7KH VWXG\·V ÀQGLQJV RIIHU LQVLJKWV LQWR some of the evolutionary—and, to some degree, revolutionary—

Shevlin and his team explore how companies navigated the 2008 to 2010 ÀQDQFLDO FULVLV ZKLOH KDYLQJ OLPLWHG RU LQ VRPH FDVHV QR FDVK ÁRZ $V WKH VWXG\ points out, “Because traditional debt and HTXLW\ ÀQDQFLQJ VRXUFHV RIWHQ EHFRPH PRUH FRVWO\ RU PRUH GLIÀFXOW WR DFFHVV GXULQJ SHULRGV RI ÀQDQFLDO FRQVWUDLQWV ÀUPV ORRN IRU DOWHUQDWLYH VRXUFHV RI IXQGV µ It is in these times, when funding options become limited, the need for creative problem solving is critical. Tax breaks DUH WKDW VROXWLRQ IRU WKH VWXG\·V VDPSOH companies.

Tax-deferral strategies operate via a simple equation: reduced current reported income + increased tax credits = decreased cash taxes paid. Therefore, cash tax savings are a form of ORZ FRVW ÀQDQFLQJ 7KLV EHJV WKH TXHVWLRQ :K\ FKRRVH WD[ planning over traditional cost-cutting techniques, e.g. reducing advertising, research and development, capital expenditures, RU VWDIÀQJ" 2QH UHDVRQ VD\V 6KHYOLQ LV HIÀFLHQF\ ´7KH ÀUP·V RSHUDWLRQV DUH OHVV OLNHO\ WR EH DGYHUVHO\ DIIHFWHG E\ tax-planning strategies. By delaying income recognition and accelerating expenses and deductions, one could think of it as

Terry Shevlin, Professor of Accounting, Associate Dean of Research and Doctoral Programs RESEARCH IN ACTION FALL 2016 | 15

ACC OU N T I NG FOR T H E S H I F T

making a smarter budget to save more cash, and do more to grow the company.”

EDVHG VWUDWHJLHV DFFRXQW IRU EHWZHHQ DQG SHUFHQW RI WKH RYHUDOO HVWLPDWHG WD[ VDYLQJV DPRQJ SURÀWDEOH ÀUPV µ 7KLV range is noteworthy because it underscores an evolution taking SODFH ZLWKLQ VXFFHVVIXO ÀUPV ([SODLQV 6KHYOLQ ´3ULRU UHVHDUFK had indicated managers primarily focused on tax strategies WKDW SURYLGHG ERWK FDVK ÁRZ and ÀQDQFLDO VWDWHPHQW EHQHÀWV VXFK DV SHUPDQHQW WD[ SODQQLQJ VWUDWHJLHV ZLWK D VHFRQGDU\ interest in deferral strategies that SURGXFH RQO\ D FDVK EHQHÀW µ 7KXV Financial Constraints researchers KDYH LGHQWLÀHG D VHD FKDQJH LQ ÀQDQFLDO PDQDJHPHQW ZKHUH D 36% VLJQLÀFDQW IRFXV LV QRZ RQ FDVK producing tax-deferral strategies. This demonstrates the advantage of collaboration within the research community with a shared goal of continuing to monitor how successful ÀUPV PDNH ÀQDQFLDO GHFLVLRQV

MEASURING SUCCESS: WIN... LOSE... OR DRAW? Tax planning is a multitasking venture. It insulates operations—a move which could potentially stave off staff reductions—while offering an opportunity to minimize income, payroll, excise and sales taxes. So, how effective has this strategy EHHQ" 6KHYOLQ DQG KLV WHDP IRXQG WKDW RQ DYHUDJH ÀUPV H[SHULHQFLQJ the largest increase in constraints UHGXFHG FDVK ÁRZ LQFUHDVHG WD[ SODQQLQJ EHWZHHQ WR percent. This equates to increases of between $3.82 and $5.15 million in tax VDYLQJV DQG EHWZHHQ DQG SHUFHQW RI RSHUDWLQJ FDVK ÁRZV 7KH results of the macroeconomic screens indicate that tightening of bank lending VWDQGDUGV GXULQJ WKH ÀQDQFLDO FULVLV LV DVVRFLDWHG ZLWK D SHUFHQW increase in tax planning. In dollar terms, this translates into $11.76 PLOOLRQ LQ WD[ VDYLQJV IRU ÀUPV RU PRUH WKDQ SHUFHQW RI WKH PHDQ ÀUP·V RSHUDWLQJ FDVK ÁRZV LQ DORQH The effectiveness of deferral strategies is considerable, according to Shevlin. “We estimate that the current tax savings from deferral-

16 | THE PAUL MERAGE SCHOOL OF BUSINESS

23%

8% 6%

26% How much influence do tax considerations KDYH RQ \RXU ILUP·V EXVLQHVV GHFLVLRQV RU financial strategies? 36% moderate influence 26% a great deal of influence 6% not sure 8% no influence 23% little influence Source: “Advocating for a Responsible Approach to Tax Planning and Management,” a survey of 112 finance executives at large U.S. firms, CFO Magazine and KPMG, February 2015

STOCK BUYBACKS TOP CORPORATE SHOPPING LISTS For what items would companies W\SLFDOO\ XVH LQFUHDVHG FDVK" 6KHYOLQ·V WHDP REVHUYHG ´FRQVWUDLQHG ÀUPV XVLQJ FDVK savings from tax planning to fund investment and to fund current operations through working capital.” )DFW6HW GDWD VXSSRUW WKLV ÀQGLQJ ZLWK ÀJXUHV VKRZLQJ WKDW 6 3 companies spent half a trillion on share repurchases over the one-year

period ending July 31, 2015, including ELOOLRQ DORQH VSHQW EHWZHHQ $SULO and June 2015.

TAX BREAKS AND THE VALUE OF PUBLIC PERCEPTION

Firms experiencing the largest increase in constraints (reduced cash flow) increased tax planning between 3.00 to 5.14 percent. This equates to increases of between $3.82 and $5.15 million in tax savings and between 2.87 and 4.82 percent of operating cash flows.

interpretations of ambiguous areas within the tax laws,” a slippery slope indeed. Consequently, the image of companies as responsible taxpayers can be a hard sell. And sell they must as public perception can LQÁXHQFH D ÀUP·V ERWWRP OLQH In February 2016, The Harris Poll® released its 17th Annual Reputation Quotient Report, a ranking of the 100 top corporate reputations, as perceived by the public. Top ranked for the eighth consecutive year is Amazon, which, in turn, cleverly used the ranking as part of an email marketing campaign. Among the top 10 companies with a strong Orange County, California presence are The Walt Disney Company, Publix Super Markets and Berkshire Hathaway. Yes, having a good reputation has marketing DSSHDO ,W·V DOVR D YLWDO PHWULF IRU GHWHUPLQLQJ WKH VXFFHVV RU IDLOXUH RI D ÀUP·V EXVLQHVV practices.

:K\ GLG VR PDQ\ ÀUPV VLPXOWDQHRXVO\ FKRVH WD[ SODQQLQJ DV D FDVK ÁRZ VROXWLRQ" Shevlin explains the timely opportunity that served as motivation: “During a recession, the government tries to stimulate the economy and encourage investment, typically with [additional] corporate tax breaks.” However, corporate tax disclosure WHQGV WR ODFN ÀQH GHWDLOV UHJDUGLQJ KRZ these tax breaks are instituted, a fact that KDG EHDULQJV RQ 6KHYOLQ·V VWXG\ UHVXOWV As he explains, “[limited] tax information SURYLGHG LQ ÀQDQFLDO VWDWHPHQWV PDNHV LW GLIÀFXOW WR PHDVXUH WD[ VDYLQJV IURP D SDUWLFXODU GHIHUUDO VWUDWHJ\ µ ,W DOVR PDNHV LW GLIÀFXOW IRU ÀUPV WR secure public trust.

CORPORATE TAX: A GLOBAL IMAGE CONCERN

:LWK D ODFN RI FRUSRUDWH WUDQVSDUHQF\ LW·V QRW VXUSULVLQJ ZKHQ John Q. Public and the media cast a suspicious eye toward corporate tax reporting practices. Some question, with a national GHÀFLW VXUSDVVLQJ WULOOLRQ DUH FRPSDQLHV SD\LQJ WKHLU IDLU VKDUH RI WKH WD[ ELOO" $QG LI QRW LV WKH HFRQRP\ VXIIHULQJ DV D UHVXOW" 6KHYOLQ EHOLHYHV ´/DUJH ÀUPV DUH XVXDOO\ EDVKHG IRU QRW paying taxes. My belief is that they are just trying to stay alive and pay their bills. This enables them to continue to employ people. Companies are doing good for society.” However, as the study QRWHV WKHUH DUH DOVR WLPHV ZKHQ D ÀUP HPSOR\V ´DJJUHVVLYH

Outside the U.S., governments experiencing their own ÀQDQFLDO FRQVWUDLQWV VXFK DV *UHHFH DQG 6SDLQ DUH LQ IDYRU of more transparency in corporate tax returns, particularly IURP PXOWLQDWLRQDO ÀUPV :LWK VXFK VFUXWLQ\ DW SOD\ ÀQDQFH executives have taken on expanded responsibilities. According to a CFO Magazine article “The New Morality in Tax Strategies,” ÀQDQFH H[HFXWLYHV KDYH IRXQG WKDW WKH\ KDYH DQ LPSRUWDQW role... that is over and above just assessing complex accounting DQG ÀQDQFLDO LPSDFWV 7KDW UROH LV WR FDOFXODWH WKH LPSOLFDWLRQV

RESEARCH IN ACTION FALL 2016 | 17

ACC OU N T I NG FOR T H E S H I F T

WKDW DQ\ WD[ GHFLVLRQV FRXOG KDYH IRU D FRPSDQ\·V SXEOLF LPDJH and reputation.” To understand the interconnectivity between tax strategies and public image, one needs only call to mind the cautionary tale of the Panama Papers. This collection of more than 11 million documents purportedly details the misuse of offshore tax havens by current and former non-U.S. heads of state. The alleged abuse of public trust has drawn comments from President Barack Obama who, in an April 5, 2016 press conference, praised the Treasury department for identifying and pursuing U.S. companies that misuse tax loopholes. However, as of this ZULWLQJ QR 8 6 ÀUP has been linked to the Panama Papers investigation. Still, corporate tax breaks could become a talking point among 2016 presidential candidates and, more likely, a focus of the next president as Washington continues to search for ways to boost the U.S. economy.

Corporate tax breaks could become a talking point among 2016 presidential candidates and, more likely, a focus of the next president as Washington continues to search for ways to boost the U.S. economy

18 | THE PAUL MERAGE SCHOOL OF BUSINESS

Terry Shevlin is a professor of Accounting, Paul Merage Chair in Business Growth, associate dean of Research and Doctoral programs at the UC Irvine Paul Merage School of Business. He earned his PhD from Stanford University LQ DQG MRLQHG WKH IDFXOW\ DW WKH 8QLYHUVLW\ of Washington where he worked for 26 years until joining UCI in the summer of 2012. Shevlin has served as editor on three academic journals: Journal of the American Taxation Association 6HQLRU (GLWRU The Accounting Review DQG &R HGLWRU Accounting Horizons DQG RQ QXPHURXV HGLWRULDO ERDUGV LQFOXGLQJ WKH WRS IRXU DFFRXQWLQJ MRXUQDOV +H KDV SXEOLVKHG QHDUO\ DUWLFOHV LQ WKH YHU\ WRS DFFRXQWLQJ DQG ÀQDQFH MRXUQDOV $Q DZDUG ZLQQLQJ UHVHDUFKHU 6KHYOLQ·V LQWHUHVWV DUH EURDG and include the effect of taxes on business decisions and asset prices, capital markets-based accounting research, earnings management, employee stock options, research design and VWDWLVWLFDO VLJQLÀFDQFH WHVWLQJ LVVXHV

L AT E S T P U B L I C AT I O N S

ACCOUNTING

state tax planning activities, shift more income to foreign tax havens, make more R&D credit claims, and make greater investments in assets that generate accelerated depreciation GHGXFWLRQV ,GHQWLI\LQJ D PDQDJHU FKDUDFWHULVWLF UHODWHG WR ÀUPV· tax policy decisions adds to an understanding of the factors that explain the substantial variation in corporate income tax SD\PHQWV DFURVV ÀUPV

PUBLICATIONS

B Y M E R A G E S C H O O L FA C U LT Y M E M B E R S

P R O F E S S O R T E R RY S H E V L I N

Title: “The Role of Managerial Ability in Corporate Tax Avoidance” Co-authors: Allison Koester and Dan Wangerin Accepted at: Management Science Most prior studies model tax avoidance as a function of ÀUP OHYHO FKDUDFWHULVWLFV DQG GR QRW FRQVLGHU KRZ LQGLYLGXDO executive characteristics affect tax avoidance. This paper LQYHVWLJDWHV ZKHWKHU H[HFXWLYHV ZLWK VXSHULRU DELOLW\ WR HIÀFLHQWO\ manage corporate resources engage in greater tax avoidance. The results show that moving from the lower to upper quartile RI PDQDJHULDO DELOLW\ LV DVVRFLDWHG ZLWK D SHUFHQW UHGXFWLRQ LQ D ÀUP·V RQH \HDU ÀYH \HDU FDVK HIIHFWLYH WD[ UDWH (75 7KH UHVHDUFKHUV H[DPLQH KRZ KLJKHU DELOLW\ PDQDJHUV UHGXFH LQFRPH WD[ SD\PHQWV DQG ÀQG WKH\ HQJDJH LQ JUHDWHU

Title: “The Effect of Corporate Tax Avoidance on the Cost of Equity” Co-authors: Beng Wee Goh, Jimmy Lee, and Chee Yeow Lim Accepted at: The Accounting Review %DVHG RQ /DPEHUW /HX] DQG 9HUUHFFKLD ·V GHULYDWLRQ RI WKH FRVW RI HTXLW\ FDSLWDO LQ WHUPV RI H[SHFWHG FDVK ÁRZV WKH researchers generated a testable hypothesis that relates tax DYRLGDQFH WR D ÀUP·V FRVW RI HTXLW\ FDSLWDO 8VLQJ WKUHH EURDG measures of tax avoidance—book-tax differences, permanent book-tax differences, and long-run cash effective tax rates—to test their hypothesis, they found that the cost of equity is lower IRU WD[ DYRLGLQJ ÀUPV 7KLV HIIHFW LV VWURQJHU IRU ÀUPV ZLWK EHWWHU RXWVLGH PRQLWRULQJ ÀUPV WKDW OLNHO\ UHDOL]H KLJKHU PDUJLQDO EHQHÀWV IURP WD[ VDYLQJV DQG ÀUPV ZLWK KLJKHU LQIRUPDWLRQ quality. Overall, their results suggest that equity investors generally require a lower expected rate of return due to the SRVLWLYH FDVK ÁRZ HIIHFWV RI FRUSRUDWH WD[ DYRLGDQFH

RESEARCH IN ACTION FALL 2016 | 19

P R O F E S S O R T E R RY S H E V L I N

Title: “The Tax Policy Debate: Increasing the Policy Impact of Academic Tax Accounting Research” Co-authors: Roy Clemons Accepted at: The Journal of American Taxation Association While academic accounting journals publish research with potential policy implications, policy makers often do not consider these articles. Useful information currently being produced by accounting researchers can have a greater policy impact if it is effectively integrated, presented, and disseminated to policy PDNHUV 7KLV SDSHU RIIHUV ÀYH UHFRPPHQGDWLRQV DLPHG DW increasing the probability that pertinent academic tax accounting UHVHDUFK ZLOO EH XVHG LQ WKH SROLF\ PDNLQJ SURFHVV LQWHJUDWH a discussion of the debate surrounding the tax policy issue XQGHU VWXG\ LQWR WKH PDQXVFULSW RIIHU GHWDLOHG LQWHUSUHWDWLRQV DQG LPSOLFDWLRQV RI WKH UHVHDUFK UHVXOWV SURIIHU QRUPDWLYH VWDWHPHQWV EDVHG RQ WKH HPSLULFDO HYLGHQFH SURYLGH D V\QRSVLV RI WKH PDQXVFULSW·V FRQWULEXWLRQ WR WKH SROLF\ GHEDWH YLD D VWUXFWXUHG DEVWUDFW DQG XWLOL]H DGGLWLRQDO FRPPXQLFDWLRQ channels to increase the visibility of the academic research to those interested in tax policy.

P R O F E S S O R T E R RY S H E V L I N

Title: “Target’s Tax Shelter Participation and Takeover Premiums” Accepted at: Contemporary Accounting Research &KRZ .ODVVHQ DQG /LX KHUHDIWHU &./ H[DPLQH ZKHWKHU 0 $ ELGGLQJ ÀUPV DUH ZLOOLQJ WR SD\ PRUH IRU WDUJHW ÀUPV WKDW GLVFORVH WKH\ KDYH QRW SDUWLFLSDWHG LQ D ´WD[ VKHOWHUµ sometime in the past. This discussion provides an overview of the past and current tax literature in accounting and places CKL within this expanding literature. It then provides a critique of this interesting and well executed study that exploits an unusual disclosure to examine tax shelter participation effects.

20 | THE PAUL MERAGE SCHOOL OF BUSINESS

P R O F E S S O R T E R RY S H E V L I N

Title: “Internal Governance and Real Earnings Management” Co-authors: Qiang Cheng and Jimmy Lee Accepted at: The Accounting Review This paper examines whether internal governance affects the extent of real earnings management in U.S. corporations. Internal governance refers to the process through which key subordinate executives provide checks and balances in the organization and affect corporate decisions. Using the number of years to retirement to capture key subordinate H[HFXWLYHV· KRUL]RQ LQFHQWLYHV DQG XVLQJ WKHLU FRPSHQVDWLRQ UHODWLYH WR &(2 FRPSHQVDWLRQ WR FDSWXUH WKHLU LQÁXHQFH ZLWKLQ WKH ÀUP WKH UHVHDUFKHUV ÀQG WKDW WKH H[WHQW RI UHDO HDUQLQJV PDQDJHPHQW GHFUHDVHV ZLWK NH\ VXERUGLQDWH H[HFXWLYHV· KRUL]RQ DQG LQÁXHQFH 7KH UHVXOWV DUH UREXVW WR DOWHUQDWLYH measures of internal governance and to various approaches used to address potential endogeneity including a differenceLQ GLIIHUHQFHV DSSURDFK ,Q FURVV VHFWLRQDO DQDO\VHV WKH\ ÀQG WKDW WKH HIIHFW RI LQWHUQDO JRYHUQDQFH LV VWURQJHU IRU ÀUPV ZLWK PRUH FRPSOH[ RSHUDWLRQV ZKHUH NH\ VXERUGLQDWH H[HFXWLYHV· contribution is higher, is enhanced when CEOs are less SRZHUIXO LV ZHDNHU ZKHQ WKH FDSLWDO PDUNHWV EHQHÀW RI PHHWLQJ or beating earnings benchmarks is higher, and is stronger in the post-SOX period. This paper contributes to the literature by examining how internal governance affects the extent of real earnings management and by shedding light on how the members of the management team work together in shaping ÀQDQFLDO UHSRUWLQJ TXDOLW\

Title: “A New Measure of Disclosure Quality: The Level of Disaggregation of Accounting Data in Annual Reports” Co-authors: Shuping Chen and Bin Maio Accepted at: Journal of Accounting Research These researchers construct a new, parsimonious, measure RI GLVFORVXUH TXDOLW\³GLVDJJUHJDWLRQ TXDOLW\ '4 ³DQG RIIHU validation tests. DQ captures the level of disaggregation of accounting data through a count of non-missing Compustat line LWHPV DQG UHÁHFWV WKH H[WHQW RI GHWDLOV LQ ÀUPV· DQQXDO UHSRUWV Conceptually DQ differs from existing disclosure measures LQ WKDW LW FDSWXUHV WKH ¶ÀQHQHVV· RI GDWD DQG LV EDVHG RQ D comprehensive set of accounting line items in annual reports. Unlike existing measures which are usually applicable for a VXEVHW RI ÀUPV RU DUH EDVHG RQ D VXEVHW RI LQIRUPDWLRQ LWHPV DQ can be generated for the universe of Compustat industrial ÀUPV 7KH\ FRQGXFW WKUHH VHWV RI YDOLGDWLRQ WHVWV E\ H[DPLQLQJ '4·V DVVRFLDWLRQ ZLWK YDULDEOHV SUHGLFWHG E\ SULRU OLWHUDWXUH to be associated with information quality. DQ is negatively SRVLWLYHO\ DVVRFLDWHG ZLWK DQDO\VW IRUHFDVW GLVSHUVLRQ DFFXUDF\ QHJDWLYHO\ DVVRFLDWHG ZLWK ELG DVN VSUHDGV DQG FRVW of equity. These associations continue to hold after they control IRU ÀUP IXQGDPHQWDOV 7DNHQ WRJHWKHU UHVXOWV IURP WKLV EDWWHU\ of validation tests are consistent with our measure capturing disclosure quality.

P R O F E S S O R T E R RY S H E V L I N

Title: “Firm-specific Estimates of Differential Persistence and their Incremental Usefulness for Forecasting and Valuation” Co-authors: Andrew Call, Max Hewitt, and Teri Yohn Accepted at: The Accounting Review

PUBLICATIONS

P R O F E S S O R T E R RY S H E V L I N

Although the differential persistence of accruals and operating FDVK ÁRZV LV D ÀUP VSHFLÀF SKHQRPHQRQ UHVHDUFK VHHNLQJ WR exploit the differential persistence of these earnings components typically employs cross-sectional forecasting models. These UHVHDUFKHUV ÀQG WKDW D PRGHO EDVHG RQ ÀUP VSHFLÀF HVWLPDWHV of the differential persistence of accruals and operating cash ÁRZV LV LQFUHPHQWDOO\ XVHIXO IRU RXW RI VDPSOH IRUHFDVWLQJ relative to state-of-the-art cross-sectional models. In doing so, WKH\ VKRZ WKDW ÀUP VSHFLÀF HVWLPDWHV RI GLIIHUHQWLDO SHUVLVWHQFH are particularly useful when forecasting earnings for more VWDEOH ÀUPV H J PRUH SURÀWDEOH ORZHU JURZWK DQG OHVV OHYHUHG ÀUPV 7KH\ DOVR GHPRQVWUDWH WKDW D WUDGLQJ VWUDWHJ\ H[SORLWLQJ LQYHVWRUV· À[DWLRQ RQ HDUQLQJV DQG EDVHG RQ ÀUP VSHFLÀF HVWLPDWHV RI GLIIHUHQWLDO SHUVLVWHQFH HDUQV VWDWLVWLFDOO\ DQG HFRQRPLFDOO\ VLJQLÀFDQW H[FHVV UHWXUQV WKDW DUH LQFUHPHQWDO to those generated by trading strategies based on the size of DFFUXDOV 7KHVH UHVXOWV VXJJHVW WKDW ÀUP VSHFLÀF HVWLPDWHV of differential persistence are incrementally informative for forecasting and valuation.

RESEARCH IN ACTION FALL 2016 | 21

ECONOMICS AND PUBLIC POLICY

PROFESSOR SIEW HONG TEOH

Title: “Limited Attention, Statement of Cash Flow Disclosure, and the Valuation of Accruals” Co-authors: Bin Miao and Zinan Zhu Accepted at: Review of Accounting Studies In this paper, researchers test for the effect of limited attention on the valuation of accruals by comparing the immediate and long-term market reactions to earnings announcements EHWZHHQ D VXEVDPSOH RI ÀUPV WKDW GLVFORVH RQO\ WKH EDODQFH VKHHW ZLWK D VXEVDPSOH RI ÀUPV WKDW GLVFORVH ERWK WKH EDODQFH VKHHW DQG WKH VWDWHPHQW RI FDVK ÁRZV 6&) LQ WKH HDUQLQJV press release. Information about accruals generally can be inferred from comparative balance sheets, but the availability of the SCF makes accruals more salient and easier to process for investors with limited attention. Controlling for potential additional information and endogeneity of SCF disclosure, WKH\ ÀQG VWURQJ HYLGHQFH WKDW 6&) GLVFORVXUH HQDEOHV PRUH HIÀFLHQW SULFLQJ RI DFFUXDOV )XUWKHU DQDO\VHV XVLQJ D SUR[\ IRU investor sophistication suggest that when SCF is absent from the earnings press release, less sophisticated investors fail to discount accruals but sophisticated investors do.

22 | THE PAUL MERAGE SCHOOL OF BUSINESS

PROFESSOR KENNETH KRAEMER (EMERITUS)

Title: “Who Captures Value from Science-Based Innovation? The Distribution of Benefits from GMR in the Hard Disk Drive Industry” Co-authors: Jason Dedrick (PhD Alumnus) Accepted at: Research Policy These researchers analyze the discovery of giant magnetoUHVLVWDQFH *05 DQG LWV GHYHORSPHQW DQG FRPPHUFLDOL]DWLRQ by the global disk drive industry to answer the question of “Who FDSWXUHV WKH EHQHÀWV IURP LQQRYDWLRQ LQ D JOREDO LQQRYDWLRQ V\VWHP"µ 7KH\ DVVHVV WKH UHWXUQV WR WKH VFLHQWLVWV ÀUPV DQG FRXQWULHV DVVRFLDWHG ZLWK *05 7KH\ ÀQG WKDW WKH )UHQFK DQG *HUPDQ VFLHQWLVWV WKDW GLVFRYHUHG *05 DQG WKHLU ODEV EHQHÀWHG E\ UHFHLYLQJ WKH 1REHO 3UL]H DQG VPDOO OLFHQVLQJ IHHV 7KH ÀUP WKDW ÀUVW FRPPHUFLDOL]HG WKH WHFKQRORJ\ ,%0 FDSWXUHG SURÀWV from selling hard disk drives and magnetic heads using GMR. Other hard disk drive and head manufacturers based in the U.S. and Japan were able to quickly assimilate the technology and catch up with IBM. France and Germany reaped limited returns GXH WR WKH ODFN RI GRPHVWLF ÀUPV ZLWK WKH DEVRUSWLYH FDSDFLW\ WR FRPPHUFLDOL]H *05 7KH 8 6 DQG -DSDQ EHQHÀWHG IURP WKH VXFFHVV RI WKHLU ÀUPV LQ FRPPHUFLDOL]LQJ *05 DV GLG RWKHU countries which were part of the global value chains of those

security market trading volumes and returns. In particular, asset markets exhibit trading volumes that are high, while individuals and asset managers trade aggressively, even when such trading results in high risk and low net returns. Moreover, asset prices GLVSOD\ SDWWHUQV RI SUHGLFWDELOLW\ WKDW DUH GLIÀFXOW WR UHFRQFLOH ZLWK rational expectations based theories of price formation. In this SDSHU WKH UHVHDUFKHUV GLVFXVV WKH UROH RI RYHUFRQÀGHQFH DV DQ explanation for these patterns.

PUBLICATIONS

FRPSDQLHV &RQVXPHUV DQG ÀUPV WKDW LQFRUSRUDWHG KDUG GULYHV LQ WKHLU SURGXFWV XOWLPDWHO\ EHQHÀWHG IURP FKHDSHU KDUG GULYHV ZLWK JUHDWHU FDSDFLW\ 7KHVH ÀQGLQJV LOOXVWUDWH WKH LPSRUWDQFH RI DEVRUSWLYH FDSDFLW\ DW WKH ÀUP DQG QDWLRQDO OHYHO LQ FDSWXULQJ EHQHÀWV IURP LQQRYDWLRQ 7KH\ DOVR VKRZ WKDW WKH EHQHÀWV WR ÀUVW PRYHU ÀUPV FDQ EH VKRUW OLYHG LQ D FRPSHWLWLYH LQGXVWU\ ZLWK open transfer of knowledge and limited appropriability regimes. Finally, they show that the location of jobs and wages associated with innovative products depends on the structure of the global YDOXH FKDLQV RI OHDGLQJ ÀUPV

P R O F E S S O R D AV I D H I R S H L E I F E R

FINANCE

P R O F E S S O R D AV I D H I R S H L E I F E R

Title: “Overconﬁdent Investors, Predictable Returns, and Excessive Trading” Co-authors: Kent Daniel Accepted at: Journal of Economic Perspectives

Title: “Asset Pricing with Extrapolative Expectations and Production” Co-authors: Jun Li, and Jianfeng Yu Accepted at: Journal of Monetary Economics Introducing extrapolative bias into a standard productionbased model with recursive preferences reconciles salient VW\OL]HG IDFWV DERXW EXVLQHVV F\FOHV ORZ FRQVXPSWLRQ YRODWLOLW\ KLJK LQYHVWPHQW YRODWLOLW\ UHODWLYH WR RXWSXW DQG ÀQDQFLDO PDUNHWV KLJK HTXLW\ SUHPLXP YRODWLOH VWRFN UHWXUQV ORZ DQG VPRRWK ULVN IUHH UDWH ZLWK SODXVLEOH OHYHOV RI ULVN DYHUVLRQ DQG intertemporal elasticity of substitution. Furthermore, the model captures return predictability based upon dividend yield, Q, and investment. Intuitively, extrapolative bias increases the variation in the wealth-consumption ratio, which is heavily priced under recursive preferences; adjustment costs decrease the covariance between marginal utility and asset returns. Empirical support for key implications of the model is also provided.

The last several decades have seen a shift away from a fully UDWLRQDO SDUDGLJP RI ÀQDQFLDO PDUNHWV WRZDUGV RQH LQ ZKLFK LQYHVWRU EHKDYLRU LV LQÁXHQFHG E\ SV\FKRORJLFDO ELDVHV 2QH of the main factors contributing to this evolution is a body of evidence showing how psycho-logical bias affects the behavior of economic actors. Another main factor is an accumulation of evidence that is hard to reconcile with fully rational models of

RESEARCH IN ACTION FALL 2016 | 23

INFORMATION SYSTEMS

higher turnover, and show that such jobs are more sensitive to the effect of likelihood of promotion on turnover. They test our K\SRWKHVHV RQ D GHWDLOHG GDWDVHW FRYHULQJ ,7 SURIHVVLRQDOV RYHU D ÀYH \HDU SHULRG DQG FRQÀUP WKDW OLNHOLKRRG RI SURPRWLRQ has the predicted effects on turnover of IT professionals. A onestandard-deviation increase in likelihood of promotion decreases WXUQRYHU E\ RYHU SHUFHQW FRQVLVWHQW ZLWK RXU SUHGLFWLRQ 7KH HPSLULFDO DQDO\VLV DOVR FRQÀUPV WKH SUHGLFWHG HIIHFWV RI boundary spanning activities.

PROFESSOR VIDYANAND CHOUDHARY

P R O F E S S O R V I D YA N A N D C H O U D H A R Y

Title: “Designing Promotion Ladders to Mitigate Turnover of IT Professionals” Co-authors: F. MacCrory and A. Pinsonneault (PhD Alumni) Accepted at: Information Systems Research Chronic excessive turnover among IT professionals has EHHQ FRVWO\ WR ÀUPV IRU GHFDGHV ZLWK DQQXDO WXUQRYHU UDWHV DV KLJK DV SHUFHQW HYHQ DPRQJ &RPSXWHUZRUOG·V ´ %HVW 3ODFHV WR :RUN LQ ,7 µ 3ULRU ,6 OLWHUDWXUH KDV LGHQWLÀHG WZR NH\ factors affecting turnover: boundary-spanning roles and low SURPRWDELOLW\ LQ RQH·V FXUUHQW ÀUP ,Q WKLV SDSHU WKH UHVHDUFKHUV draw on tournament theory, which is primarily concerned with inducing effort in employees, to decompose promotability into WZR GLVWLQFW FRQVWUXFWV WKH OLNHOLKRRG RI SURPRWLRQ DQG EHQHÀW from promotion, and demonstrate that each has a distinct role in affecting turnover rates. Their key result is that a job ladder motivating IT professionals with large, infrequent promotions will lead to higher turnover than a job ladder with smaller, more frequent promotions. They describe the conditions under which rearranging the job ladder creates economic value for WKH ÀUP 7KH\ DOVR RIIHU DQ H[SODQDWLRQ IRU WKH REVHUYDWLRQ that jobs characterized by boundary-spanning activities have

24 | THE PAUL MERAGE SCHOOL OF BUSINESS

Title: “Patching the Cloud: Impact of SaaS on Patching Strategy and the Timing of Software Release” Co-authors: Zhe Zhang (PhD Alumnus) Accepted at: Information Systems Research 7KLV SDSHU H[WHQGV SULRU UHVHDUFK RQ WKH VRIWZDUH YHQGRUV· optimal release time and patching strategy in the context of FORXG FRPSXWLQJ DQG VRIWZDUH DV D VHUYLFH 6DD6 7UDGLWLRQDOO\ users are responsible for running on-premises software; in contrast, a vendor is responsible for running SaaS software, and the SaaS vendor incurs a larger proportion of defectrelated costs than a vendor of on-premises software. These UHVHDUFKHUV H[DPLQH WKH HIIHFW RI WKLV GLIIHUHQFH RQ D YHQGRU·V choice of when to release software and the proportion of VRIWZDUH GHIHFWV WR À[ 6XUSULVLQJO\ WKH\ ÀQG WKDW GHVSLWH incurring a larger proportion of defect-related costs, it is optimal for the SaaS vendor to release software earlier and with more defects, and to patch a smaller proportion of defects, than the on-premises software vendor. Even though the SaaS vendor LQFXUV KLJKHU GHIHFW UHODWHG FRVWV KH REWDLQV D ODUJHU SURÀW WKDQ WKH WUDGLWLRQDO YHQGRU ,Q DGGLWLRQ WKH\ ÀQG WKDW IRU D YHQGRU who uses the SaaS model, the optimal number of defects after SDWFKLQJ PD\ EH ORZHU WKDQ WKH VRFLDOO\ HIÀFLHQW RXWFRPH 7KLV occurs despite the fact that the number of defects after patching in the SaaS model is higher than in the traditional on-premises model.

highlight the importance of coordination among chief marketing, VXVWDLQDELOLW\ DQG ÀQDQFH RIÀFHUV LQYHVWLQJ LQ FRUSRUDWH VRFLDO responsibility and marketing for stock returns, contingent on the ÀUP·V PDUNHWLQJ DQG 5 ' VSHQGLQJ DQG LQGXVWU\ FKDUDFWHULVWLFV

PUBLICATIONS

MARKETING

PROFESSOR IMRAN CURRIM

Title: “Marketing Spending, Firm Visibility, and Asymmetric Stock Returns of Corporate Social Responsibility Strengths and Concerns” Co-authors: Hannah Oh, John Bae, Jooseop Lim (PhD Alumni), Yu Zhang Accepted at: European Journal of Marketing This paper focuses on the unique goal of understanding how PDUNHWLQJ VSHQGLQJ D SUR[\ IRU ÀUP YLVLELOLW\ PRGHUDWHV WKH effects of corporate social responsibility strengths and concerns on stock returns in the short and long-terms. In contrast to WKH UHVRXUFH EDVHG YLHZ RI WKH ÀUP YLVLELOLW\ WKHRU\ EDVHG RQ stakeholder awareness and expectations, offers asymmetric predictions on the moderation effects of marketing spending. The predictions are tested based on data from KLD, Compustat, and CRSP from 2001-2010, and panel data based regression models. Two results support the predictions of visibility theory over those of the resource-based view. First, strengths are associated with higher stock returns, for low marketing VSHQGLQJ ÀUPV DQG RQO\ LQ WKH ORQJ WHUP 6HFRQG FRQFHUQV DUH associated with lower stock returns, for high marketing spending ÀUPV DOVR RQO\ LQ WKH ORQJ WHUP $ SURÀOLQJ DQDO\VLV LQGLFDWHV WKDW KLJK PDUNHWLQJ VSHQGLQJ ÀUPV KDYH KLJK 5 ' VSHQGLQJ DQG PRUH OLNHO\ WR RSHUDWH LQ % & WKDQ % % LQGXVWULHV 7KH ÀQGLQJV

P R O F E S S O R M A R Y G I L LY

Title: “The Impact of Diversity on Institutional Longevity” Co-authors: Samantha N.N. Cross (PhD Alumna) Accepted at: International Journal of Research in Marketing In contemporary societies, culturally diverse families and blending processes are expected outcomes when accommodating different cultural backgrounds. Manifestations of creolization processes are studied within the context of Thanksgiving celebrations, as the authors analyze how family diversity leads to blending processes which spur innovative outcomes and institutional change, and inevitably contribute to institutional longevity. Photographic and menu data, gathered from 76 Thanksgiving celebrations across three types of households, are supplemented with data from over 30 depth interviews. It is in this context of ritualized consumption that the authors examine what happens when resilient consistency meets increasing diversity and inevitable change. Findings indicate that family composition, shared conceptualizations and context matter and provide a different perspective on the links between diversity, tradition, creolization and institutional longevity.

RESEARCH IN ACTION FALL 2016 | 25

P R O F E S S O R M A R Y G I L LY A N D P R O F E S S O R JOHN GRAHAM (EMERITUS)

Title: “Managing Consumer Debt: Culture, Compliance and Completion” Co-authors: Stephanie Dellande (PhD Alumna) Accepted at: Journal of Business Research In this paper, the researchers examine the cultural dimensions RI SDUWLFLSDWLRQ LQ D GHEW PDQDJHPHQW SURJUDP '03 $UFKLYDO data from Consumer Credit Counseling Service provide insights into the behavior of consumers in a DMP. Latino clients differ from Anglo clients, and are ultimately less successful in resolving debt problems. The difference appears to be the expected monthly payment established for clients. While only GHEW OHYHO GHWHUPLQHV /DWLQRV· H[SHFWHG SD\PHQW $QJORV appear to better negotiate an expected payment from creditors, increasing their success. Importantly, homophily increases compliance for Latino debtor-counselor dyads. Overall, this VWXG\ FRQWULEXWHV WR WKH WUDQVIRUPDWLYH VHUYLFH UHVHDUFK 765 OLWHUDWXUH E\ VXJJHVWLQJ ZD\V FXOWXUH LQÁXHQFHV DGKHUHQFH WR DQG FRPSOHWLRQ RI D '03 OHDGLQJ WR ÀQDQFLDO IUHHGRP IRU consumers in distress.

26 | THE PAUL MERAGE SCHOOL OF BUSINESS

PROFESSOR CONNIE PECHMANN

Title: “An Investigation of Consumer and Doctor Regulatory Beliefs and Regulatory Knowledge about Pharmaceutical Drug Promotions” Co-authors: Jesse R. Catlin (PhD Alumnus) Accepted at: Journal of the Association for Consumer Research (JACR) Pharmaceutical drug companies engage in numerous promotional activities, from advertising to sales calls. Yet little is known about whether consumers or doctors believe these activities are regulated by the Food and Drug Administration )'$ RU ZKHWKHU WKHLU EHOLHIV DUH DFFXUDWH ,Q WKLV SDSHU researchers refer to these constructs respectively as regulatory beliefs and regulatory knowledge, and they introduce and SDUWLDOO\ WHVW D FRQFHSWXDO PRGHO LQFOXGLQJ WKHP 6SHFLÀFDOO\ WKH\ VXUYH\HG FRQVXPHUV DQG GRFWRUV DERXW different marketing-type activities undertaken by pharmaceutical drug companies, and assessed their persuasion knowledge, regulatory beliefs and regulatory knowledge. They found that both groups but especially doctors had high persuasion knowledge, but doctors had weaker regulatory beliefs about there being FDA oversight, and on regulatory knowledge both JURXSV PDQLIHVWHG FRPSDUDEOH DQG VXEVWDQWLDO GHÀFLWV 7KLV research contributes theoretically by introducing the constructs RI UHJXODWRU\ EHOLHIV DQG UHJXODWRU\ NQRZOHGJH DQG ÀQGLQJ WKDW H[SHUWLVH LQÁXHQFHV UHJXODWRU\ EHOLHIV EXW QRW NQRZOHGJH

Title: “The Effects of Advertising and Other Marketing Communications on Health-related Consumer Behaviors” Co-authors: Jesse R. Catlin (PhD Alumnus) Accepted at: Current Opinion in Psychology Advertisements and other marketing communications extensively discuss food and nutrition, tobacco, alcohol, and prescription drugs. In addition to mass media advertising DQG SXEOLF VHUYLFH DQQRXQFHPHQWV 36$V PHVVDJHV are placed on product labels and in television shows and social media. Research indicates that these health-related FRPPXQLFDWLRQV FDQ KDYH VLJQLÀFDQW DQG PHDVXUDEOH HIIHFWV on consumer cognitions, emotions, and behaviors. Some messages enhance health by discouraging unhealthy or risky consumption; others do the opposite. While many messages have their intended effects, other messages are discounted RU HYHQ FRXQWHUSURGXFWLYH 7KH VSHFLÀF HIIHFWV RIWHQ GHSHQG on message content and/or execution in combination with consumer characteristics. Therefore, it is important to tailor the communications to the target consumers, and to test for intended and unintended effects.

PROFESSOR CONNIE PECHMANN

Design: A 2-group randomized controlled trial assessed the QHW EHQHÀW RI DGGLQJ D 7ZHHW 4XLW VXSSRUW JURXS WR D XVXDO FDUH control condition of nicotine patches and a cessation website. 3DUWLFLSDQWV 3DUWLFLSDQWV ZHUH VPRNHUV FRKRUWV RI FRKRUW DJHV ZKR LQWHQGHG WR TXLW VPRNLQJ XVHG Facebook daily, texted weekly, and had mobile phones with unlimited texting. Intervention: All participants received 56 days of nicotine patches, emails with links to the smokefree.gov cessation website, and instructions to set a quit date within 7 days. Additionally, Tweet2Quit participants were enrolled in 20-person, 100-day Twitter groups and received daily discussion topics via Twitter and daily engagement feedback via text. Measures: The primary outcome was sustained abstinence at 7-, 30- and 60-days post-quit-date. 5HVXOWV 3DUWLFLSDQWV PHDQ DJH \HDUV SHUFHQW PDOH SHUFHQW FROOHJH GHJUHHG SHUFHQW &DXFDVLDQ DYHUDJHG 6' FLJDUHWWHV SHU GD\ DQG 6' years of smoking. Participants randomized to Tweet2Quit averaged 58.8 tweets/participant and the average tweeting GXUDWLRQ ZDV GD\V SDUWLFLSDQW 7ZHHW 4XLW GRXEOHG VXVWDLQHG DEVWLQHQFH RXW WR GD\V IROORZ XS SHUFHQW YHUVXV FRQWURO SHUFHQW 25 &, S 7ZHHWLQJ YLD SKRQH SUHGLFWHG WZHHW volume, and tweet volume predicted sustained abstinence S 7KH GDLO\ DXWRFRPPXQLFDWLRQV FDXVHG WZHHWLQJ VSLNHV DFFRXQWLQJ IRU SHUFHQW RI WZHHWV Conclusions: Tweet2Quit was engaging and doubled sustained abstinence. Its low cost and scalability makes it viable as a global cessation treatment.

PUBLICATIONS

PROFESSOR CONNIE PECHMANN

Title: “A Randomized Controlled Trial Evaluation of Tweet2Quit: A Social Network Quit-smoking Intervention” Co-authors: Kevin Delucchi, Cynthia M. Lakon and Judith J. Prochaska Accepted at: Tobacco Control Background: Researchers evaluated a novel Twitter-delivered intervention for smoking cessation, Tweet2Quit, which sends daily, automated communications to small, private, selfhelp groups to encourage high quality, online, peer-to-peer discussions.

RESEARCH IN ACTION FALL 2016 | 27

OPERATIONS AND DECISION TECHNOLOGIES

effectiveness of its intermediary role, can help to build trust towards the marketplace, enhancing trust towards the community of providers and driving the intent to adopt online microsourcing. 7KXV WKLV SDSHU FRQÀUPV WKH UROHV RI RQOLQH PDUNHWSODFHV DV both the resource pool and the transaction intermediary from the perspective of clients. Finally, this paper not only indicates the relevance of resource theories in understanding this new trend in outsourcing, but also suggests the importance of trusted relational governance in governing online microsourcing transactions.

PROFESSOR ROBIN KELLER

Title: “Trust Antecedents, Trust and Online Microsourcing Adoption: An Empirical Study from the Resource Perspective” Co-authors: Baozhou Lu, Tao Zhang, and Liangyan Wang (PhD Alumna) Accepted at: Decision Support Systems The online microsourcing marketplace is a new form of outsourcing that is organized over online platforms for the performance of relatively small service tasks. Microsourcing offers D PRUH ÁH[LEOH ZD\ WR KLUH FRQWUDFW ZRUNHUV RU WR RXWVRXUFH Prior research indicates the importance of individual-level trust when choosing providers in online sourcing marketplaces. These researchers argue that institution-based trust is also crucial for online microsourcing adoptions. Drawing on a trust framework adapted from prior literature, this paper uncovers the trustbuilding mechanisms in online microsourcing marketplaces, as well as the marketplace-related attributes for online microsourcing adoption. The proposed research model is tested with a data set collected from the clients of a typical marketplace in China— ]KXEDMLH FRP 7KH ÀQGLQJV VXJJHVW WKDW SHUFHSWLRQV RI UHVRXUFH based attributes of a marketplace, together with the perceived

28 | THE PAUL MERAGE SCHOOL OF BUSINESS

Title: “Thinking Styles Affect Reactions to Brand Crisis Apologies” Co-authors: Shijian Wang , Liangyan Wang (PhD Alumna) and Jie Li Accepted at: European Journal of Marketing 3XUSRVH³7KLV DUWLFOH H[DPLQHV KRZ D SHUVRQ·V WKLQNLQJ VW\OH VSHFLÀFDOO\ KROLVWLF YHUVXV DQDO\WLF DQG D ÀUP·V FULVLV DSRORJ\ ZLWK WKH UHPHGLDO VROXWLRQ IUDPHG LQ ´ZK\µ YV ´KRZµ WHUPV FDQ LQWHUDFWLYHO\ LPSDFW FRQVXPHUV· SHUFHLYHG HIÀFDF\ RI WKH ÀUP WR respond to the crisis and their impression or evaluation of the brand. Design/methodology/approach—Hypotheses were tested through three experimental studies involving 308 participants recruited in China. Participants answered survey questions LQYHVWLJDWLQJ WKH LQWHUDFWLYH HIIHFWV IURP FRQVXPHUV· WKLQNLQJ VW\OH FXOWXUH DV D SUR[\ LQ VWXG\ PHDVXUHG LQ VWXG\ RU SULPHG LQ VWXG\ DQG D EUDQG·V FULVLV DSRORJ\ ZLWK WKH UHPHGLDO VROXWLRQ IUDPHG LQ ´ZK\µ YV ´KRZµ WHUPV RQ FRQVXPHUV· SHUFHLYHG HIÀFDF\ DQG HYDOXDWLRQ RI WKH ÀUP Findings—The frame of the remedial solution resulting in D KLJKHU HYDOXDWLRQ LPSURYHPHQW GHSHQGHG RQ D FRQVXPHU·V WKLQNLQJ VW\OH )RU KROLVWLF WKLQNHUV D ´ZK\µ YV ´KRZµ IUDPHG remedial solution resulted in a higher evaluation improvement; KRZHYHU IRU DQDO\WLF WKLQNHUV D ´KRZµ YV ´ZK\µ IUDPHG remedial solution resulted in a higher evaluation improvement. $GGLWLRQDOO\ WKH UHVXOWV VKRZHG WKDW D FRQVXPHU·V SHUFHLYHG HIÀFDF\ RI WKH EUDQG EHLQJ DEOH WR VXFFHVVIXOO\ UHVSRQG WR WKH crisis mediated the interactive effects of the remedial solution framing and thinking styles on the evaluation improvement.

PROFESSOR ROBIN KELLER

Title: “Discounting over Subjective Time: Subjective Time Perception Helps Explain Multiple Discounted Utility Anomalies” Co-authors: Yitong Wang and Liangyan Wang (PhD Alumni) Accepted at: International Journal of Research Marketing Consumers often face choices involving intertemporal tradeoffs. Existing research suggests that decision makers in general do not obey discounted utility theory because their discount rates are context dependent. Recent literature LQFRUSRUDWHV GHFLVLRQ PDNHUV· VXEMHFWLYH SHUFHSWLRQ RI WLPH LQWR WKH FODVVLF GLVFRXQWHG XWLOLW\ PRGHO DQG ÀQGV UHODWLYHO\ FRQVWDQW discount rates over subjective time. In addition to replicating previous work, the researchers investigated the missing component—the magnitude effect, provided a holistic view via a more comprehensive experiment including multiple anomalies, and found that subjective time perception was able to explain most of the anomalies simultaneously in a single scenario.

PROFESSOR ROBIN KELLER

Title: “A Markov Model to Evaluate Cost-Effectiveness of Antiangiogenesis Therapy Using Bevacizumab in Advanced Cervical Cancer” Co-authors: Lindsey Minion, Jiaru Bai (PhD Student), Gareth Forde (HCEMBA Alumnus), et al. Accepted at: Gynecologic Oncology

PUBLICATIONS

Research limitations/implications—Different ways of framing WKH UHPHGLDO VROXWLRQ LQ D ÀUP·V DSRORJ\ ZLOO KDYH GLIIHUHQW impacts on people with different thinking styles. Participants in studies 2 and 3 were recruited from samples on campus in China. Additionally, the automobile brand used in this study is ÀFWLRQDO WR DYRLG SULRU EUDQG QDPH RU EUDQG FRPPLWPHQW LPSDFW 3UDFWLFDO LPSOLFDWLRQV³7KH ÀQGLQJV SURYLGH HYLGHQFH WKDW framing of the remedial solution can be leveraged as a tool to UHGXFH QHJDWLYH LPSDFW UHVXOWLQJ IURP D EUDQG FULVLV 6SHFLÀFDOO\ the results suggest that companies may do well to employ a “why” framed remedial solution, particularly in cases where consumers are likely to process information holistically. Conversely, a “how” framed remedial solution may be effective in situations where consumers are likely to process information analytically. Originality/value—This research contributes to the literature, EHLQJ DPRQJ WKH ÀUVW WR FRQVLGHU KRZ WKH UHPHGLDO VROXWLRQ IUDPLQJ LQ D ÀUP·V DSRORJ\ FDQ HQKDQFH SHRSOH·V HYDOXDWLRQ RI the brand and decrease the perceived negative impact resulting from the brand crisis.

Objective: To evaluate the cost-effectiveness of bevacizumab in recurrent/persistent and metastatic cervical cancer using recently reported updated survival and toxicology data. Methods: A Markov decision tree based on the Gynecologic 2QFRORJ\ *URXS UDQGRPL]HG WULDO ZDV FUHDWHG 7KH 2013 MediCare Services Drug Payment Table and Physician Fee Schedule provided costs. In the 5-year model subjects transitioned through the following states: response, progression, minor complications, severe complications, death. Patients experiencing a health utility per month according to treatment effectiveness were calculated. Because cervical cancer survival is measured in months rather than years, results were reported in both quality adjusted cervical cancer life months and \HDUV 4$/PRQWK 4$/< DGMXVWHG IURP D EDVHOLQH RI KDYLQJ advanced cervical cancer during a month. Results: The estimated total cost of therapy with bevacizumab is approximately 13.2 times that for chemotherapy alone, adding SHU PRQWKV \HDU RI OLIH JDLQHG UHVXOWLQJ LQ DQ LQFUHPHQWDO FRVW HIIHFWLYHQHVV UDWLR ,&(5 RI SHU PRQWK of added life. The ICER increased to $5,775 per month of added OLIH DQG 4$/PRQWK 4$/< GXH WR WKH VPDOOHU difference in QALmonths. With 75 percent bevacizumab cost UHGXFWLRQ WKH ,&(5 LV 4$/PRQWK 4$/< ZKLFK WUDQVODWHV WR IRU WKH PRQWK \HDU JDLQ LQ 26 Conclusions: Increased cost is primarily related to the cost of drug and not the management of bevacizumab-induced complications. Cost reductions in bevacizumab result in dramatic declines in the ICER, suggesting that cost reconciliation in advanced cervical cancer may be possible through the availability RI ELRVLPLODUV DQG RU OHVV H[SHQVLYH HTXDOO\ HIÀFDFLRXV DQWL angiogenesis agents.

RESEARCH IN ACTION FALL 2016 | 29

ORGANIZATION AND MANAGEMENT

managers who were low in interpersonal power distance, UHJDUGOHVV RI WKHLU VXERUGLQDWHV· VRFLHWDO SRZHU GLVWDQFH cultural values had better team collaboration, innovation, and future performance. Trust in fellow team members was found to mediate these relationships. Originality/value: Findings from this study contribute to an understanding of power distance, and also provide insight into the central question of when and how management practices should be adapted to local cultures.

PROFESSOR JONE PEARCE

Title: “Should Management Practice Adapt to Cultural Values? The Evidence Against Power Distance Adaptation” Co-authors: Alaka Rao (PhD Alumna) Accepted at: Cross Cultural & Strategic Management Purpose: This paper focuses on the cultural concept of power GLVWDQFH WR WHVW ZKHWKHU RU QRW FXOWXUH SUDFWLFH ÀW RU XQLYHUVDO supervisory practices are associated with team collaboration, innovation, current and future team performance. This test is possible because power distance is conceptually deconstructed and scales developed that reliably and validly differentiate between the societal level values and workplace practices. Next, drawing on these measures, researchers tested the cultureÀW YV XQLYHUVDO SUDFWLFHV K\SRWKHVHV LQ D VDPSOH RI HWKQLFDOO\ similar employees dispersed across the United States and India. Design/ methodology/ approach: Data were collected from a survey administered to employees and their supervisors in a Non-Western Multinational Corporation. Findings: Researchers found support for the universalpractices perspective in this study. Those Indian and local

30 | THE PAUL MERAGE SCHOOL OF BUSINESS

P R O F E S S O R C H R I S B AUM A N

Title: “The Pipeline Project: Pre-Publication Independent Replications of a Single Laboratory’s Research Pipeline” Co-authors: Jenny Miles (PhD Student), et al. Accepted at: Journal of Experimental Social Psychology This crowdsourced project introduces a collaborative DSSURDFK WR LPSURYLQJ WKH UHSURGXFLELOLW\ RI VFLHQWLÀF UHVHDUFK LQ ZKLFK ÀQGLQJV DUH UHSOLFDWHG LQ TXDOLÀHG LQGHSHQGHQW ODERUDWRULHV EHIRUH UDWKHU WKDQ DIWHU WKH\ DUH SXEOLVKHG 7KH goal is to establish a non-adversarial replication process with KLJKO\ LQIRUPDWLYH ÀQDO UHVXOWV 7R LOOXVWUDWH WKH 3UH 3XEOLFDWLRQ ,QGHSHQGHQW 5HSOLFDWLRQ 33,5 DSSURDFK UHVHDUFK JURXSV

projects to keep his crew members busy working on projects WR JHQHUDWH SRVLWLYH FDVK ÁRZV +RZHYHU WKLV DSSURDFK KDV D PDMRU GUDZEDFN EHFDXVH LW FDXVHV ´LQWHQWLRQDOµ RU IRUHVHHDEOH SURMHFW GHOD\V ,QWHQWLRQDO SURMHFW GHOD\V FDQ LQÁLFW H[SOLFLW and implicit costs on the contractor when frustrating customers DEDQGRQ WKHLU SURMHFWV DQG RU ÀOH FRPSODLQWV RU ODZVXLWV Researchers present a queueing model to capture uncertain FXVWRPHU RU SURMHFW DUULYDOV DQG GHSDUWXUHV DORQJ ZLWK WKH possibility of customer abandonment. Also, associated with HDFK DGPLVVLRQ SROLF\ L H WKH PD[LPXP QXPEHU RI SURMHFWV WKDW WKH FRQWUDFWRU ZLOO DFFHSW WKH\ PRGHO WKH XQGHUO\LQJ WUDGHRII EHWZHHQ DFFHSWLQJ WRR PDQ\ SURMHFWV WKDW FDQ LQFUHDVH FXVWRPHU GLVVDWLVIDFWLRQ DQG DFFHSWLQJ WRR IHZ SURMHFWV WKDW FDQ UHGXFH FUHZ XWLOL]DWLRQ 7KH\ H[DPLQH WKLV WUDGHRII analytically so as to determine the optimal admission policy and the optimal number of crew members. They further apply our model to analyze other issues including worker productivity and project pricing. Finally, their model can be extended to allow for multiple classes of projects with different types of crew members.

PUBLICATIONS

conducted replications of all ten moral judgment effects which the last author and his collaborators had “in the pipeline” as of $XJXVW 6L[ ÀQGLQJV UHSOLFDWHG DFFRUGLQJ WR DOO UHSOLFDWLRQ FULWHULD RQH ÀQGLQJ UHSOLFDWHG EXW ZLWK D VLJQLÀFDQWO\ VPDOOHU HIIHFW VL]H WKDQ WKH RULJLQDO RQH ÀQGLQJ UHSOLFDWHG FRQVLVWHQWO\ LQ WKH RULJLQDO FXOWXUH EXW QRW RXWVLGH RI LW DQG WZR ÀQGLQJV IDLOHG WR UHSOLFDWH HQWLUHO\ ,Q WRWDO SHUFHQW RI WKH RULJLQDO ÀQGLQJV IDLOHG DW OHDVW RQH PDMRU UHSOLFDWLRQ FULWHULRQ 3RWHQWLDO ways to implement and incentivize pre-publication independent replication on a large scale are discussed.

PROFESSOR RICK SO

PROFESSOR RICK SO AND PHD STUDENT JIARU BAI

Title: “A Queueing Model for Managing Small Projects under Uncertainties” Co-authors: Chris Tang Accepted at: European Journal of Operation Research In this paper, researchers consider a situation in which a home improvement project contractor has a team of regular crew members who receive compensation even when they are idle. Because both projects arrivals and the completion time of each project are uncertain, the contractor needs to manage the utilization of his crews carefully. One common approach adopted by many home improvement contractors is to accept multiple

Title: “Component Procurement Strategies in Decentralized Assembly Systems under Supply Uncertainty” Co-authors: Wenting Pan (PhD Alumna) Accepted at: IIE Transactions In this paper, researchers analyze the interactions among the assembler and two component suppliers in their procurement GHFLVLRQV XQGHU D YHQGRU PDQDJHG LQYHQWRU\ 90, FRQWUDFW 8QGHU WKH 90, FRQWUDFW WKH DVVHPEOHU ÀUVW RIIHUV D XQLW SULFH IRU each component and will pay component suppliers only for the amounts used to meet the actual demand. The two independent component suppliers then decide on the production quantities of their individual components before the actual demand is realized. They assume that one of the component suppliers has uncertainty in the supply process in which the actual amount of components available for assembly is equal to a

RESEARCH IN ACTION FALL 2016 | 31

random fraction of the production quantity. Under the assembly structure, both component suppliers need to take into account the underlying supply uncertainty in deciding their individual production quantities, as both components are required for the DVVHPEO\ RI WKH ÀQDO SURGXFW 7KH\ ÀUVW DQDO\]H WKH VSHFLDO case under deterministic demand, and then extend their analysis to the general case under stochastic demand. They derive the optimal component prices offered by the assembler and the corresponding equilibrium production quantities of the component suppliers.

is to understand how competition in supply chains would impact such joint selling partnerships among complementary suppliers. 5HVHDUFKHUV ÀUVW PRGHO FRPSHWLWLRQ DW WKH VXSSO\ OHYHO ZKLFK LV generated from the existence of multiple partially substitutable EUDQGV RU VXSSOLHUV IRU D SDUWLFXODU FRPSRQHQW 7KH\ WKHQ extend the analysis to a model which also involves retail competition that is caused by decentralization among retailers ZKR DVVHPEOH VXSSOLHUV· FRPSRQHQWV LQWR ÀQDO SURGXFWV DQG VHOO to customers. The analysis of a model with two complementary components, one of which has multiple brands, indicates that the supply level competition discourages joint selling of complementary goods. That is, when competing brands become PRUH DOLNH RU VXEVWLWXWDEOH FRPSOHPHQWDU\ VXSSOLHUV DFW PRUH independently in pricing and selling their items. However, retail competition leads to an opposite effect: Competition among retailers would actually encourage complementary suppliers to package their goods together and act jointly.

P R O F E S S O R S H U YA Y I N A N D R I C K S O

PROFESSOR SHUYA YIN

Title: “Joint Selling of Complementary Components under Brand and Retail Competition” Co-authors: Yuhong He (PhD Alumna) Accepted at: Manufacturing and Service Operations Management Suppliers of complementary goods often package their items together when selling to downstream retailers. One motivation behind this behavior is to reduce double marginalization through FRRUGLQDWHG SULFLQJ VR WKDW V\VWHP HIÀFLHQF\ LV LPSURYHG DQG LQGLYLGXDO PHPEHUV FDQ DOVR EHQHÀW 7KH REMHFWLYH RI WKLV SDSHU

32 | THE PAUL MERAGE SCHOOL OF BUSINESS

Title: “Impact of an ‘Online-to-Store’ Channel on Demand Allocation, Online Pricing and Profitability” Co-authors: James Cao (PhD Alumnus) Accepted at: European Journal of Operational Research The growth of e-commerce in the past decade has opened the door to a new and exciting opportunity for retailers to better target different segments of the customer population. In this paper, researchers develop an analytical framework to study the impact of an “online-to-store” channel on the demand DOORFDWLRQV DQG SURÀWDELOLW\ RI D UHWDLOHU ZKR VHOOV SURGXFWV WR customers through multiple distribution channels. This new channel can help the retailer tap new customer segments and generate additional demand, but may also hurt the retailer by cannibalizing existing channels and increasing operating costs. The analytical model allows the researchers to evaluate these fundamental tradeoffs and provide useful managerial insights UHJDUGLQJ WKH VSHFLÀF SURGXFW DQG PDUNHW FKDUDFWHULVWLFV WKDW

Drawing on in-depth interviews and archival data from three ,QGLDQ ,7 RIIVKRUH RXWVRXUFLQJ ÀUPV WKH\ H[DPLQH KRZ organizational and individual identity processes work in tandem WR DGGUHVV WKLV WKUHDW 7KH\ ÀQG WKDW ÀUPV GR QRW UHVROYH WKLV threat by regulating employee identity directly as they claim but instead provide workers with an organizational toolkit—a set of RUJDQL]DWLRQDOO\ DYDLODEOH FXOWXUDO UHVRXUFHV H J IUDPHV DQG VWRULHV DQG SROLWLFDO UHVRXUFHV H J SROLFLHV DQG SURFHGXUHV that workers use selectively and strategically to construct positive identities. By bringing a toolkit perspective to identity processes, they contribute to theory and research on cross-level identity linkages, the strategic nature of identity processes, and the local context of global identity.

PUBLICATIONS

DUH PRVW FRQGXFLYH IRU LQFUHDVLQJ SURÀWDELOLW\ 7KHLU DQDO\VLV provides some simple conditions under which adding an RQOLQH WR VWRUH FKDQQHO ZRXOG OHDG WR KLJKHU SURÀWV IRU SURGXFWV that are only available online. If the product is also available in-store, the analysis becomes more complex. In this case, they performed numerical experiments to generate insights on when the OS channel should be used. Their results imply that the retailer needs to carefully select the set of products to be offered through the online-to-store channel.

PROFESSOR SHARON KOPPMAN

Title: “In the Eye of the Beholder: The Stratification of Taste in a Cultural Industry” Accepted at: The Sociological Quarterly

PROFESSOR SHARON KOPPMAN

Title: “Third World ‘Sloggers’ or Elite Global Professionals? Using Organizational Toolkits to Redefine Work Identity in IT Offshore-Outsourcing.” Co-authors: Elisa Mattarelli and Amar Gupta Accepted at: Organization Science

Scholars argue that cultural intermediaries—that is, people that sell popular culture—accomplish their work through an DIÀQLW\ EHWZHHQ WKHLU SHUVRQDO WDVWH DQG WKDW RI WKHLU FRQVXPHUV Yet, studies have not examined the social origins of such taste. To address this gap, this researcher uses qualitative and quantitative methods to analyze data collected from a probability VDPSOH RI 8 6 DGYHUWLVLQJ SUDFWLWLRQHUV 6KH ÀQGV WKDW DOWKRXJK WKH WDVWHV RI FXOWXUDO LQWHUPHGLDULHV DUH VRFLDOO\ VWUDWLÀHG WKH\ are not consistently the “middlebrow” taste long associated with such industries. Additionally, by incorporating a two-dimensional model of class and focusing on how cultural goods are consumed, she extends knowledge on taste more generally.

Organizations increasingly rely on teams that span national and organizational boundaries, yet team members in emerging FRXQWULHV DQG YHQGRU ÀUPV DUH QRW WUHDWHG DV SURIHVVLRQDO peers by their Western and client-based peers. To understand how they respond to this identity threat, the researchers integrate two literatures that suggest two possible answers: an organizational response, based on the critical literature on top-down identity regulation, and an individual response, based on the positive literature on bottom-up identity construction.

RESEARCH IN ACTION FALL 2016 | 33

PROFESSOR JOHN JOSEPH

Title: “Entry Timing and Innovation Strategy in Feature Phones” Co-authors: Ronald Klingebiel Accepted at: Strategic Management Journal 7KLV LQGXFWLYH VWXG\ H[DPLQHV KRZ ÀUPV PDNH GHFLVLRQV about the timing of innovations, focusing on the mobile handset industry during the feature-phone era. Through qualitative and quantitative data, these researchers reveal how individual WHFKQRORJ\ HQWU\ GHFLVLRQV DUH LQÁXHQFHG E\ D SRUWIROLR OHYHO timing preference, and how this preference informs other aspects of innovation strategy, too. Early movers address greater, more uncertain revenue opportunities with broader, less selective innovation portfolios. Conversely, late movers target lower, more certain revenue opportunities with narrower, more selective portfolios. While timing per se seems unrelated to performance, a timing-strategy alignment is. Future research on WKH HTXLÀQDO FRQÀJXUDWLRQV WKH\ SURSRVH³EURDG QRQVHOHFWLYH for early movers and narrow/selective for late movers—could thus help resolve the debate about the link between timing and performance.

34 | THE PAUL MERAGE SCHOOL OF BUSINESS

PROFESSOR PHILIP BROMILEY

Title: “Is R&D Risky?” Co-authors: D. Rau Accepted at: Strategic Management Journal Many studies use R&D intensity or R&D spending as a proxy for risk-taking, but there is little evidence that either associates SRVLWLYHO\ ZLWK ÀUP ULVN 7KHVH UHVHDUFKHUV DQDO\]H WKH UHODWLRQV EHWZHHQ 5 ' LQWHQVLW\ 5 ' VSHQGLQJ WR VDOHV DQG 5 ' spending on the one hand and eleven different indicators of ÀUP ULVN RQ WKH RWKHU XVLQJ GDWD IURP WR ÀUPV LQ YDULRXV LQGXVWULHV RYHU \HDUV 7KH DQDO\VLV ÀQGV D JHQHUDO ODFN RI FRQVLVWHQW SRVLWLYH DVVRFLDWLRQ EHWZHHQ 5 ' DQG ÀUP risk, making the use of R&D as an indicator of risk taking questionable. Furthermore, R&D intensity and spending do not correlate positively, suggesting they measure different constructs. They discuss potential reasons for these nonVLJQLÀFDQW UHVXOWV 7KHLU VWXG\ GHPRQVWUDWHV WKDW UHVHDUFKHUV should avoid casual use of R&D as a proxy for risk taking, ZLWKRXW H[SOLFLWO\ SURYLGLQJ D FOHDU GHÀQLWLRQ DQG PHDVXUHPHQW model for risk.

PROFESSOR PHILIP BROMILEY

Title: “Social, Behavioral, and Cognitive Influences on Upper Echelons During Strategy Process: A Literature Review” Co-authors: D. Rau Accepted at: Journal of Management This study reviews research on the social, behavioral, and FRJQLWLYH LQÁXHQFHV RQ &(2V WRS PDQDJHPHQW WHDPV 707V and the CEO-TMT interface during strategic decision making. Researchers identify the key issues examined in this research RYHU WKH SDVW WHQ \HDUV DQG UHODWH GHYHORSPHQWV LQ WKH ÀHOG WR previous knowledge in this area. They also attempt to identify ZKDW FRQVWLWXWHV DQ HVWDEOLVKHG ERG\ RI NQRZOHGJH LQ WKH ÀHOG and therefore, areas that need additional examination. Their review indicates that while there has been an explosion of UHVHDUFK RQ WKH LQÁXHQFH RI &(2 SHUVRQDOLW\ DQG 707 VRFLDO processes on strategy process, much remains to be done in terms of examining CEO and TMT cognition, particularly at the level of the CEO-TMT interface.

PROFESSOR PHILIP BROMILEY

Title: “Operations Management and the Resource Based View: Another View” Co-authors: D. Rau Accepted at: Journal of Operations Management This paper evaluates the usefulness of the resource-based YLHZ 5%9 WR WKH ÀHOG RI RSHUDWLRQV PDQDJHPHQW %DVHG RQ the seminal RBV articles, the researchers argue that using the RBV does not align with the objectives and activities of operations management researchers in several ways. First, the dependent variable in the RBV is sustained competitive advantage. Using sustained competitive advantage as a dependent variable implies that scholars focus on explaining WKH GLIIHUHQFHV EHWZHHQ WKH UHODWLYHO\ IHZ ÀUPV ZLWK VXVWDLQHG FRPSHWLWLYH DGYDQWDJH DQG DOO WKH RWKHU ÀUPV LJQRULQJ SHUIRUPDQFH YDULDWLRQV ZLWKLQ WKH JUHDW PDVV RI ÀUPV ,Q addition, competitive advantage exists at the level of the EXVLQHVV RU WKH ÀUP DQG GRHV QRW GLUHFWO\ WUDQVODWH LQWR WKH normal level of operations management research. Measuring VXVWDLQHG FRPSHWLWLYH DGYDQWDJH DOVR SUHVHQWV GLIÀFXOWLHV Second, the explanatory variables in the RBV are resources that must be rare, valuable and hard or impossible to imitate. 0HDVXULQJ YDOXDEOH UHVRXUFHV RU IDFWRUV ÀUPV FDQQRW imitate poses serious problems both in demonstrating value LQGHSHQGHQW RI WKH IDFWRU·V LPSDFW RQ SHUIRUPDQFH L H DYRLGLQJ WDXWRORJ\ DQG LQ PHDVXULQJ XQLTXH RU QHDUO\ XQLTXH HQWLWLHV Third, under the RBV, prescription is problematic; you cannot SUHVFULEH WKLQJV WKDW ÀUPV FDQ UHDGLO\ LPSOHPHQW EHFDXVH VXFK things can be imitated. The researchers present the practiceEDVHG YLHZ 3%9 DV D VLPSOHU DQG EHWWHU DOWHUQDWLYH IRU operations management where scholars attempt to explain the HQWLUH UDQJH RI ÀUP DQG XQLW SHUIRUPDQFH EDVHG RQ WUDQVIHUDEOH practices.

RESEARCH IN ACTION FALL 2016 | 35

FA C U LT Y I N THE NEWS T H E S E N E W FA C U LT Y M E M B E R S R E C E N T LY H AV E B E E N M E N T I O N E D I N T H E N E W S

V C C H O U D H A R Y, A S S O C I AT E D E A N, U N D E R G R A D U AT E PROGRAMS

J O A N NA H O, PROFESSOR, ACCOUNTING

• •

Appointed associate dean of Undergraduate Programs for the Merage School.

M I R E I L L E J A C O B S O N, A S S O C I AT E P R O F E S S O R , ECONOMICS/PUBLIC POLICY

IMRAN CURRIM, C H A N C E L L O R’ S PROFESSOR, MARKETING

•

Appointed to the Committee on UCI Scholarly Honors & Awards for a second two-year term.

•

V I J AY G U R B A X A N I , PROFESSOR, I N F O R M AT I O N S Y S T E M S

3XEOLVKHG DQ DUWLFOH WLWOHG ´<RX 'RQ·W +DYH WR %H D Software Company to Think Like One” in the Harvard Business Review.

Appointed, as of May 1, 2016, to a 3-year term on the editorial board of the American Economic Journal: Economic Policy.

JOHN JOSEPH, A S S I S TA N T P R O F E S S O R , S T R AT E G Y

•

36 | THE PAUL MERAGE SCHOOL OF BUSINESS

Appointed editor for the Journal of International Accounting Research.

Appointed Representative-at-large for the Strategy Process interest group of the Strategic Management Society. Appointed associate editor of the Journal of Organizational Design.

LIBBY WEBER, A S S I S TA N T P R O F E S S O R , S T R AT E G Y

• •

•

Appointed to the Committee for a Study of Performance-Based Safety Regulations by the Transportation Research Board, National Research Council of the National Academies. Plenary speaker, Program Committee Member, and Special Track Organizer for the 12th INTERNATIONAL &21)(5(1&( RQ 2SHUDWLRQV 5HVHDUFK ,&25 Havana, Cuba; March 8-11, 2016, co-sponsored by INFORMS.

•

P E T E R N AVA R R O , PROFESSOR, ECONOMICS/PUBLIC POLICY

•

&URXFKLQJ 7LJHU :KDW &KLQD·V 0LOLWDULVP 0HDQV IRU WKH World named by The Globalist as Top Five Book of the Year. Received UCI Distinguished Faculty Award for Teaching.

Nominated for the Best Conference Paper Award for the 2016 Strategic Management Society Annual Conference for her paper with Professor Chris Bauman titled, “The Impact of Promotion and Prevention Contracts on Trust in Repeated Exchanges: An Experimental Investigation.” Elected as a Representative at Large for the Corporate Strategy Interest Group for the Strategic Management Society. Appointed as a guest editor for an Academy of Management Review Special Issue titled, “Sociocognitive Perspectives in Strategy and Strategic Management.”

FACULTY IN THE NEWS

ROBIN KELLER, PROFESSOR, O P E R AT I O N S AND DECISION TECHNOLOGIES

MARGARETHE WIERSEMA, DEAN’S P R O F E S S O R , S T R AT E G I C M A NAG E M E N T

• •

Received an honorary doctorate from the Copenhagen Business in March 2016. Received an Outstanding Teaching Award from the Health Care Executive MBA Program at the Merage School.

T E R R Y S H E V L I N, A S S O C I AT E D E A N, RESEARCH AND DOCTORAL PROGRAMS

•

Appointed associate dean of Research and Doctoral Studies for the Merage School.

RESEARCH IN ACTION FALL 2016 | 37

WELCOME N E W FA C U LT Y MEMBERS T H E S E FA C U LT Y M E M B E R S R E C E N T LY J O I N E D T H E PA U L M E R A G E S C H O O L O F B U S I N E S S .

K E V I N B R A D F O R D, LECTURER, MARKETING Kevin Bradford earned a Bachelor of Arts from the University of Northern Iowa, and an MBA from the University of Notre Dame. He earned a PhD from the 8QLYHUVLW\ RI )ORULGD %UDGIRUG·V UHVHDUFK H[SORUHV VLJQLÀFDQW issues within the marketing system and its relationship to society. He received an “Excellence in Sales Scholarship Award” from the American Marketing Association for a paper entitled “Personal Selling and Sales Management: A Relationship Marketing Perspective.” Bradford teaches sales management and consumer and customer behavior at both the undergraduate and MBA levels.

T O N YA B R A D F O R D , A S S I S TA N T P R O F E S S O R , MARKETING Tonya Bradford joined the Marketing area as an assistant professor. Bradford received a Bachelor of Arts, an MBA and a PhD from Northwestern University. She has worked in WKH ÀQDQFLDO VHFWRU ERWK GRPHVWLFDOO\ DQG DEURDG DQG SUHYLRXVO\ taught at Mendoza College of Business at the University of Notre Dame. Her research focuses on ritual and community through contexts of money management and intergenerational asset transfers. She explores the relationships across market and gift exchange to understand how consumers use market resources to enact rituals.

38 | THE PAUL MERAGE SCHOOL OF BUSINESS

ELIZABETH CHUK, A S S I S TA N T P R O F E S S O R , ACCOUNTING Elizabeth Chuk joined the Accounting area as an assistant professor. Chuk earned a Bachelor of Science from the University of California at Berkeley and a PhD from the University of Washington in Seattle. Her research focuses on two aspects RI ÀQDQFLDO UHSRUWLQJ L WKH LPSDFW RI UHJXODWLRQ RQ ÀQDQFLDO UHSRUWLQJ DQG LL WKH LPSDFW RI ÀQDQFLDO UHSRUWLQJ RQ WKH information environment. In her 2013 dissertation “Economic Consequences of Mandated Accounting Disclosures: Evidence,” &KXN VKRZV KRZ ÀUPV DOWHU WKHLU LQYHVWPHQW GHFLVLRQV WR respond to new accounting regulations. She previously taught at the University of Southern California.

N. Edward Coulson joins the Economics and Public Policy area as professor and director of research for the Center for Real Estate. Coulson previously served as professor of Economics and director of the Lied Institute for Real Estate Studies at the University of Nevada, Las Vegas. Prior to UNLV, he served as Professor of Economics and King Faculty Fellow in Real Estate at The Pennsylvania State University where he had been a PHPEHU RI WKH IDFXOW\ VLQFH DQG KDG UHFHLYHG QXPHURXV outstanding teaching awards. Coulson has served as co-editor of Real Estate Economics and is a member of the editorial ERDUGV RI RWKHU OHDGLQJ MRXUQDOV LQ WKH ÀHOG ,Q -DQXDU\ he became co-editor of Journal of Regional Science. He was recently elected by the membership of American Real Estate DQG 8UEDQ (FRQRPLFV $VVRFLDWLRQ WR VHUYH DV WKH RUJDQL]DWLRQ·V president for 2016. Coulson received his B.S. in Economics from the University of California, Riverside, and a PhD from UC San Diego.

PAT R I C I A W E L L M E Y E R , C L I N I C A L A S S I S TA N T PROFESSOR, ACCOUNTING Patricia Wellmeyer joined the Accounting area as clinical assistant professor. She has served on the Accounting IDFXOW\ DW WKH 0HUDJH 6FKRRO IRU ÀYH \HDUV DQG KDV OHG WKH successful Master of Professional Accountancy program as director. Wellmeyer holds a PhD in Auditing/Accounting from the Norwegian School of Economics. She received a Bachelor of Science from the University of California, Riverside and a Master of Science in Accountancy from California State University, )XOOHUWRQ 6KH LV DOVR &3$ DQG &*0$ FHUWLÀHG :HOOPH\HU·V research focuses on auditor judgment and risk assessments, audit quality, audit sampling, audit group decision making SURFHVVHV DQG G\QDPLFV ÀQDQFLDO VWDWHPHQW DQG DXGLWRU reporting models. She has presented at academic conferences and has been accepted for publication in Contemporary Accounting Research.

MARITZA SALAZAR, A S S I S TA N T P R O F E S S O R , O R G A N I Z AT I O N A N D M A NAG E M E N T Maritza Salazar joined the Organization and Management area as an assistant professor. Salazar earned a Bachelor in Arts in Psychology from Stanford University, an MSW in Industrial Social Work from the University of Southern California. She holds a PhD LQ %XVLQHVV $GPLQLVWUDWLRQ IURP 1HZ <RUN 8QLYHUVLW\·V /HRQDUG N. Stern School of Business. Her research focuses on learning and innovation in teams and organizations. She received a multi-year NSF grant which studies and facilitates the integrative capacity of interdisciplinary science teams. Salazar uses her WHDP VFLHQFH H[SHUWLVH WR VSHDN WR WKH $UP\ 5HVHDUFK 2IÀFH Fortune 500 companies, the National Institutes of Health, and many medical centers around the United States.

NEW FACULTY MEMBERS

N. E D WA R D C O U L S O N, PROFESSOR, ECONOMICS AND PUBLIC POLICY ( R E A L E S TAT E )

RESEARCH IN ACTION FALL 2016 | 39

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